sinmah resources berhad

SINMAH RESOURCES BERHAD301653-V

Our customers keep coming back for more of the same. For Farm’s Best. NaturallyPelanggan kami terus datang balik untuk mendapat lebih banyak yang sama. Semestinya Untuk Farm’s Best

LAPORAN TAHUNAN 2004 ANNUAL REPORT

As one of the nation’s leadingintegrated poultry producers, we areengaged in the production, processing,marketing and distribution of fresh andfrozen chicken and other preparedfood items. Our chicken products areprimarily marketed under the Farm’s Best brand name to retailers,distributors and markets that weserve.We ensure that every piece thatgoes into every packaging is the finest,most wholesome quality available. Sono matter where our customers buy ourproducts, when they see the Farm’sBest label, they know they are gettingdelicious, natural, 100% chicken. That’swhy our customers keep coming backfor more of the same. For Farm’s Best, naturally.

Sebagai salah satu daripada pengeluarayam bersepadu negara yangterunggul, kami terlibat dalampengeluaran, pemprosesan,pemasaran dan pengedaran ayamsegar dan disejukbeku dan baranganmakanan yang disediakan. Produkayam kami kebanyakannya dipasarkandi bawah nama jenama Farm's Bestkepada peruncit, pengedar danpasaran yang kami beri khidmat. Kamipastikan bahawa setiap unit yangmasuk ke setiap pembungkusanadalah yang terbaik, kualiti palingselamat dimakan boleh didapati. Jaditidak kira di mana pelanggan kamimembeli produk kami, bila merekamelihat label Farmbest, mereka ketahuibahawa mereka mendapat 100%ayam, lebih banyak benda lazat,semula jadi. Itulah sebabnyapelanggan kami terus datang balikuntuk mendapat lagi yang sama.Semestinya untuk Farm's Best.

kandunganNotis Mesyuarat Agung Tahunan 2

Penyata Mengiringi Notis

Mesyuarat Agung Tahunan Ke-Sebelas 4

Struktur Korporat 8

Maklumat Korporat 9

Profil Para Pengarah 10-19

Penyata Pengerusi 22-27

Penyata Tadbir Urus Korporat 30-35

Penyata Kawalan Dalaman 42-43

Laporan Jawatankuasa Audit 46-48

contentsNotice of Annual General Meeting 3

Statement Accompanying

Notice of Eleventh Annual General Meeting 5

Corporate Structure 8

Corporate Information 9

Directors’ Profile 10-19

Chairman’s Statement 22-27

Corporate Governance Statement 36-41

Statement on Internal Control 44-45

Audit Committee Report 49-51

Financial Statements 52-99

Statistics on Shareholdings 100-102

Statistics on Warrantholdings 103-104

List of Properties 105-111

Proxy Form

SINMAH RESOURCES BERHAD (301653-V)

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notis mesyuarat agung tahunan

NOTIS ADALAH DENGAN INIDIBERI bahawa MesyuaratAgung Tahunan Ke-SebelasSyarikat akan diadakan di BilikBunga Teratai, Tingkat Tujuh,Renaissance Melaka Hotel,Jalan Bendahara, 75100 Melakapada hari Selasa, 28 Jun 2005jam 11.00 pagi untukmenimbang urusan-urusanberikut:-

AGENDA

URUSAN BIASA:

1. Untuk menerima dan melulusPenyata Kewangan Teraudit bagitempoh berakhir 31 Disember2004 dan Laporan Pengarah danLaporan Juruaudit berhubungdengannya.

Resolusi Biasa 1

2. Untuk melulus yuran-yuran paraPengarah bagi tempoh berakhir31 Disember 2004.

Resolusi Biasa 2

3. Untuk melantik semula Pengarah-pengarah berikut yang bersaraselaras dengan Artikel 106,Tataurusan Pertubuhan:-

(a) Encik Fong Kok YongResolusi Biasa 3

(b) Encik Ng Cheu Kuan Resolusi Biasa 4

(c) Encik Mohd Khasan BinAhmad

Resolusi Biasa 5

4. Untuk menimbang dan, sekiranyadifikirkan wajar, meluluskandengan atau tanpapengubahsuaian, Resolusi berikut:

"BAHAWA Tuan Haji BaharomBin Abd. Wahab, seorangPengarah yang bersara mengikutSeksyen 129 (2) Akta Syarikat,1965, adalah dan dengan inidilantik semula sebagai PengarahSyarikat selaras dengan Seksyen129 (6) Akta Syarikat, 1965 danuntuk memegang jawatansehingga tamatnya MesyuaratAgung Tahunan Syarikat yangakan datang.

Resolusi Biasa 6

5. Untuk melantik semula TetuanErnst & Young sebagai JuruauditSyarikat dan memberi kuasakepada Lembaga Pengarah untukmenetapkan ganjaran mereka.

Resolusi Biasa 7

URUSAN KHAS:

6. Untuk menimbang dan sekiranyadifikirkan wajar untuk meluluskanresolusi berikut dengan atau tanpaubahsuaian, Resolusi Biasaberikut:

• Pertukaran Nama Syarikat

"BAHAWA kelulusan adalahdengan ini diberikan kepadaSyarikat untuk menukar namanyadaripada Sinmah ResourcesBerhad kepada Farm’s BestBerhad, berkuatkuasa daripadatarikh pengeluaran Sijil PerakuanPemerbadanan atas PertukaranNama Syarikat oleh SuruhanjayaSyarikat Malaysia dan denganmenggantikan nama SinmahResources Berhad kepada Farm’sBest Berhad di dalamMemorandum dan ArtikelTataurusan Pertubuhan Syarikatdan di mana-mana nama Syarikatterpapar DAN BAHAWA mana-mana Pengarah dan SetiausahaSyarikat adalah dan dengan inidiberi kuasa untuk menjalankanurusan-urusan rasmi yangdiperlukan untuk melaksanakanpertukaran nama tersebut."

Resolusi Khas 1

LAIN-LAIN URUSAN:

7. Untuk membincang lain-lainurusan biasa yang mana notistelah diberi sewajarnya selarasdengan Artikel TataurusanPertubuhan Syarikat dan AktaSyarikat, 1965.

ATAS PERINTAH LEMBAGAPENGARAH

NURULUYUN BINTI ABDULJABAR (MIA 9113)LIEW SENG AUN (MIA 13109)Setiausaha-setiausaha Syarikat

Melaka

6 Jun 2005

Nota:

1. Setiap Ahli yang berhak untuk hadirdan mengundi pada Mesyuarat adalahberhak untuk melantik proksi atauproksi-proksi untuk hadir danmengundi bagi pihak beliau. Seorangproksi boleh tetapi tidak semestinyamerupakan seorang ahli Syarikat danperuntukan-peruntukan Seksyen149(1)(a), (b), (c) dan (d) Akta Syarikat1965 tidak akan terpakai kepadaSyarikat.

2. Di mana seorang ahli melantik dua (2)orang atau lebih proksi, pelantikantidak akan sah kecuali beliaumenyatakan bahagian daripadapemegangan saham beliau untukdiwakili oleh setiap proksi.

3. Borang Proksi hendaklahditandatangani oleh pelantik atau wakilbeliau yang diberi kuasa sewajarnyasecara bertulis atau, sekiranya ahlimerupakan perbadanan, hendaklahdisempurnakan di bawah meteraibiasa atau oleh wakil atau pegawaiyang dibenarkan.

4. Instrumen melantik proksi hendaklahdiserahkan di Level 17, MenaraMilenium, Jalan Damanlela, PusatBandar Damansara, 50490 KualaLumpur, tidak lewat daripada 48 jamsebelum masa yang ditetapkan bagiMesyuarat atau mana-manapenangguhannya.

5. Nota Penjelasan

Perlantikan Semula Pengarahmelebihi usia 70 tahun

Resolusi Biasa No. 6 dicadangkan dibawah perkara (4) di atas adalahmengikut Seksyen 129(6) AktaSyarikat, 1965 yang memerlukan agarresolusi berasingan diluluskan untukmelantik Tuan Haji Baharom Bin Abd.Wahab yang melebihi usia 70 tahunsebagai Pengarah Syarikat dan untukmemegang jawatan sehinggatamatnya Mesyuarat Agung TahunanSyarikat yang akan datang. Resolusihendaklah diluluskan oleh majorititidak kurang daripada tiga perempatdaripada Ahli-ahli tertentu Syarikatyang berhak untuk mengundi secarasendiri atau di mana proksidibenarkan, melalui proksi padaMesyuarat Agung Tahunan Syarikat.

Cadangan Pertukaran Nama

Resolusi Khas No. 1 dicadangkan dibawah perkara (6), adalah untukmenukar nama Syarikat untukmengambil peluang ke ataskepopularan tanda niaga "Farm’s Best"sebagaimana didaftarkan di bawahnama anak Syarikat, Sinmah FoodIndustries Sdn Bhd. Cadanganpertukaran nama kepada "Farm's BestBerhad" adalah untuk menggambarkandengan lebih baik kegiatan danpemilikan Syarikat. Resolusi khasakan memerlukan kelulusan olehmajoriti tiga perempat daripada ahli-ahli yang hadir dan mengundi secarasendiri atau melalui proksi.

SINMAH RESOURCES

BERHAD (301653-V)

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notice of annual general meeting

NOTICE IS HEREBY GIVENTHAT the Eleventh AnnualGeneral Meeting of theCompany will be held at BilikBunga Teratai, 7th Floor,Renaissance Melaka Hotel,Jalan Bendahara, 75100 Melakaon Tuesday, 28 June 2005 at11.00 a.m. for the followingpurposes:

AGENDA

ORDINARY BUSINESS:

1. To receive the Audited FinancialStatements for the period ended31 December 2004 together withthe Reports of the Directors andAuditors thereon.

Ordinary Resolution 1

2. To approve the Directors’ fees forthe period ended 31 December2004.


3. To re-elect the following Directorsretiring pursuant to Article 106 ofthe Articles of Association:-

(a) Mr Fong Kok Yong


(b) Mr Ng Cheu Kuan


(c) Encik Mohd Khasan BinAhmad


4. To consider and, if thought fit,pass with or without modifications,the following Resolution:

"THAT Tuan Haji Baharom BinAbd. Wahab, a Director whoretires pursuant to Section 129 (2)of the Companies Act, 1965, beand is hereby re-appointed asDirector of the Company pursuantto Section 129 (6) of theCompanies Act, 1965 and to holdoffice until the conclusion of thenext Annual General Meeting ofthe Company."


5. To re-appoint Messrs Ernst &Young as the Company’s Auditorsand to authorise the Board ofDirectors to fix their remuneration.


SPECIAL BUSINESS:

6. To consider and, if thought fit,pass with or without modifications,the following Special Resolution:

• Proposed Change of Name

"THAT the name of the Companybe changed from SINMAHRESOURCES BERHAD to FARM’SBEST BERHAD with effect from thedate of the issuance of theCertificate of Incorporation onChange of Name of the Companyby the Companies Commission ofMalaysia and by substituting thename of Sinmah ResourcesBerhad to Farm’s Best Berhad inthe Company’s Memorandum andArticles of Association andwherever the name of theCompany appears AND THATthe Directors and the Secretary ofthe Company be and are herebyauthorised to carry out all thenecessary formalities in effectingthe change of name."

Special Resolution 1

ANY OTHER BUSINESS:

7. To transact any other business forwhich due notice shall have beengiven in accordance with theCompany’s Articles of Associationand the Companies Act, 1965.

BY ORDER OF THE BOARD

NURULUYUN BINTI ABDULJABAR (MIA 9113)LIEW SENG AUN (MIA 13109)Company Secretaries

Melaka

6 June 2005

Notes:

1. A member entitled to attend and voteat the Meeting is entitled to appoint aproxy or proxies to attend and vote onhis (her) behalf. A proxy may but neednot be a member of the Company andthe provisions of Section 149(1)(a), (b),(c) and (d) of the Companies Act,1965 shall not apply to the Company.

2. Where a member appoints two (2) ormore proxies, the appointment shall beinvalid unless he (she) specifies theproportion of his (her) shareholdings tobe represented by each proxy.

3. The Proxy Form shall be signed by theappointor or his (her) attorney dulyauthorized in writing or, if the memberis a corporation, must be executedunder its common seal or by itsauthorized attorney or officers.

4. The instrument appointing a proxyshall be deposited at Level 17, MenaraMilenium, Jalan Damanlela, PusatBandar Damansara, 50490 KualaLumpur, not less than 48 hours beforethe time set for the Meeting or anyadjournment thereof.

5. Explanatory Notes:-

Re-appointment of Director over70 years of age

The Ordinary Resolution No. 6proposed under item (4) above is inaccordance with Section 129(6) of theCompanies Act, 1965 which requiresthat a separate resolution be passedto re-appoint Tuan Haji Baharom BinAbd. Wahab who is over 70 years ofage as Director of the Company and tohold office until the conclusion of thenext Annual General Meeting of theCompany. The Resolution must bepassed by a majority of not less thanthree-fourths of such Members of theCompany as being entitled to vote inperson or where proxies are allowed,by proxy at the Annual GeneralMeeting of the Company.

Proposed Change of Name

The Special Resolution No. 1 proposedunder item (6), is to change the nameof the Company to take advantage onthe popularity of the trade mark"Farm’s Best" as registered under thename of the Company’s subsidiary,Sinmah Food Industries Sdn Bhd. Theproposed change of name to "Farm’sBest Berhad" is to better reflect theCompany’s activities and ownership.The special resolution will require thepassing by a three-fourths majority ofthe members present and voting inperson or by proxy.


4

penyata mengiringi notisnotis mesyuarat agung tahunan ke-sebelas

1. Pengarah-pengarah yang menawarkan diri untuk pelantikan atau pelantikan

semula pada Mesyuarat Agung Tahunan Ke-Sebelas Sinmah Resources Berhad:

i. Encik Fong Kok Yong (Resolusi Biasa 3)

ii. Encik Ng Cheu Kuan (Resolusi Biasa 4)

iii. Encik Mohd Khasan Bin Ahmad (Resolusi Biasa 5)

iv. Tuan Haji Baharom Bin Abd. Wahab (Resolusi Biasa 6)

2. Butir-butir kehadiran pengarah-pengarah pada Mesyuarat Lembaga diadakan

bagi tempoh kewangan berakhir 31 Disember 2004:

Nama Pengarah Kehadiran

Y. Bhg. Datuk Haji Abdul Razak Bin Alias 4 daripada 5

Y. Bhg. Datuk Ng Peng Hay @ Ng Peng Hong 4 daripada 5

Mr Fong Kok Yong 5 daripada 5

Mr Fong Kiah Yeow 5 daripada 5

Mr Fong Ngan Teng 5 daripada 5

Mr Fong Choon Kai 5 daripada 5

Mr Ng Cheu Kuan 5 daripada 5

Tuan Haji Baharom Bin Abd Wahab 5 daripada 5

Encik Mohd Khasan Bin Ahmad 5 daripada 5

3. Tempat, tarikh dan masa Mesyuarat Agung Tahunan Ke-Sebelas:

Tarikh Mesyuarat Masa Mesyuarat Tempat Mesyuarat

28 Jun 2005 11.00 pagi Bilik Bunga Teratai

(Selasa) Tingkat Tujuh

Renaissance Melaka Hotel

Jalan Bendahara

75100 Melaka

SINMAH RESOURCES

BERHAD (301653-V)

5

statement accompanying of

notice of eleventh annual general meeting

1. Directors who are standing for re-election at the Eleventh Annual General Meting

of Sinmah Resources Berhad:

i. Mr Fong Kok Yong (Ordinary Resolution 3)

ii. Mr Ng Cheu Kuan (Ordinary Resolution 4)

iii. Encik Mohd Khasan Bin Ahmad (Ordinary Resolution 5)

iv. Tuan Haji Baharom Bin Abd. Wahab (Ordinary Resolution 6)

2. Details of attendance of Directors at Board Meetings held during the financial

period ended 31 December 2004:

Name of Directors Attendance

Y. Bhg. Datuk Haji Abdul Razak Bin Alias 4 out of 5

Y. Bhg. Datuk Ng Peng Hay @ Ng Peng Hong 4 out of 5

Mr Fong Kok Yong 5 out of 5

Mr Fong Kiah Yeow 5 out of 5

Mr Fong Ngan Teng 5 out of 5

Mr Fong Choon Kai 5 out of 5

Mr Ng Cheu Kuan 5 out of 5

Tuan Haji Baharom Bin Abd Wahab 5 out of 5

Encik Mohd Khasan Bin Ahmad 5 out of 5

3. Place, date and time of the Eleventh Annual General Meeting:

Date of Meeting Time of Meeting Place of Meeting

28 June 2005 11.00 a.m. Bilik Bunga Teratai

(Tuesday) 7th Floor

Renaissance Melaka Hotel

Jalan Bendahara

75100 Melaka

It’s true. Most people prefer chicken for a variety of reasons. To them, a meal is never

complete without their favourite white meat, prepared to suit their taste buds. It’s not

surprising then that our wide range of processed chicken products continue to remain

popular amongst Malaysians and markets that we serve. Because, when it comes to

quality, they know that we deliver, always!

Memang benar. Ramai orang memilih ayam untuk pelbagai alasan. Bagi mereka,

makanan tidak akan lengkap tanpa daging putih kegemaran mereka, disediakan

mengikut selera mereka. Maka tidak hairanlah bahawa rangkaian produk ayam diproses

kami yang luas terus kekal popular di kalangan warga Malaysia dan pasaran yang kami

hidangkan. Sebab apabila bercakap fasal kualiti, mereka tahu yang

kami boleh sediakan, sentiasa!

everybody’s

favourite choicesemua orang sukaramai


8

struktur korporatcorporate structure

SINMAH RESOURCES

BERHAD301653-V

100% Sinmah Livestocks Sdn Bhd

58.91% Joint Farming Sdn Bhd

60% Joint Food Proccessing Sdn Bhd20% Farm’s Goodness Sdn Bhd

75% Chem Ventures Sdn Bhd51% Syarikat Perniagaan Suann Sdn Bhd

100% Halal Poultry Meat Processing Sdn Bhd

99.99% Sinmah Multifeed Sdn Bhd

100% Sinmah Development Sdn Bhd

100% Realtemas Realty Sdn Bhd100% Sinmah Builders Sdn Bhd100% Cosmal Enterprise Sdn Bhd

100% Sinmah Breeders Sdn Bhd

30.77% Ban Yen Sdn Bhd

100% Sinmah Egg Products Sdn Bhd

51% Sinmah Poultry Farm Sdn Bhd(formerly known as TTK Poultry Farm Sdn Bhd)

100% Premier Layer Breeders Sdn Bhd25%

100% Sinmah Food Industries Sdn Bhd

100% SM Feed Technologies Sdn Bhd

50% Farm’s Best Eggmart Sdn Bhd

25% Sinmah Poultry Processing (S) Pte Ltd

100% Sinmah Ventures Sdn Bhd

51% Chix Unlimited Inc.70% FB Food (Nanjing) Pte. Ltd.

100% Lynbridge Sdn Bhd

49.9% SMNS Rubber Holdings Sdn Bhd

100% Smallholdings Management (Melaka & N. Sembilan) Sdn Bhd

SINMAH RESOURCES

BERHAD (301653-V)

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maklumat korporatcorporate information

LEMBAGA PENGARAHBOARD OF DIRECTORS

Y. Bhg. Datuk Haji Abdul Razak Bin AliasPengerusi/Chairman

Mr Fong Kok Yong Pengarah Urusan/Managing Director

Mr Fong Kiah YeowPengarah Eksekutif/Executive Director

Mr Fong Ngan TengPengarah Eksekutif/Executive Director

Mr Fong Choon KaiPengarah Eksekutif/Executive Director

Mr Ng Cheu KuanPengarah Eksekutif/Executive Director

Y. Bhg. Datuk Ng Peng Hay @ Ng Peng HongPengarah Eksekutif/Executive Director

Tuan Haji Baharom Bin Abd. WahabPengarah Bukan Eksekutif/Independent Non-Executive Director

Encik Mohd Khasan Bin AhmadPengarah Bukan Eksekutif/Independent Non-Executive Director

SETIAUSAHA-SETIAUSAHASYARIKATCOMPANY SECRETARIES

Nuruluyun Binti Abdul Jabar (MIA 9113)Liew Seng Aun (MIA 13109)

PENDAFTARREGISTRAR

Symphony Share Registrars Sdn. Bhd.(formerly known as Malaysian Share RegistrationServices Sdn. Bhd.)

Level 26, Menara Multi-Purpose Capital Square No.8 Jalan Munshi Abdullah50100 Kuala LumpurTel : 03-2721 2222Fax : 03-2721 2530/1

PEJABAT BERDAFTARREGISTERED OFFICE

AG 5730Alor Gajah Industrial Estate78000 Alor GajahMelakaTel : 06-556 1293Fax : 06-556 2445

ALAMAT MENYIMPAN DAFTAR OPSYENPLACE WHERE REGISTER OF OPTIONS KEPT

AG 5730Alor Gajah Industrial Estate78000 Alor GajahMelakaTel : 06-556 1293Fax : 06-556 2445

JURUAUDITAUDITORS

Ernst & YoungAkauntan Bertauliah/CharteredAccountantsLot 1, 6th Floor, Menara PertamJalan BBP 2, Taman Batu Berendam PutraBatu Berendam75350 MelakaTel : 06-336 2399Fax : 06-336 2899

Bank-bank UtamaPrincipal Bankers

Hong Leong Bank BerhadAffin Bank BerhadEON Bank BerhadBumiputra-Commerce Bank Berhad

Penyenaraian Di Bursa SahamStock Exchange Listing

Bursa Malaysia Securities Berhad(formerly known as Malaysia Securities ExchangeBerhad)

– Papan Kedua/Second Board


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profil para pengarah directors’profile

Y. Bhg. Datuk Haji Abdul Razak dilantik ke Lembaga Pengarah Sinmah Resources Berhad ("Sinmah")pada 2 Ogos 1996 dan kemudian menjadi Pengerusi Sinmah pada 24 Julai 2001. Beliau merupakanPengerusi dan ahli-ahli Jawatankuasa Audit dan Penamaan dan juga ahli Jawatan kuasa Imbuhan Sinmah.

Y. Bhg. Datuk Haji Abdul Razak tamat pendidikan menengah beliau di Tampin, Negeri Sembilan. Beliauadalah Speaker Dewan Undangan Negeri Melaka dari 1982 hingga 1986, ahli Jawatankuasa Eksekutif NegeriMelaka dari 1978 hingga 1982 dan Wakil Rakyat dari 1974 hingga 1986. Sejak daripada itu, beliau telahsecara aktifnya terlibat dengan kegiatan kebajikan dan pada masa ini memegang beberapa jawatan sepertiPresiden Majlis Bekas Wakil Rakyat (MUBARAK) Malaysia dan Pengerusi Cawangan Melaka. Selain daripadaitu, beliau juga Pengerusi bagi beberapa Persatuan Ibu Bapa & Guru-guru di beberapa Sekolah danPertubuhan Ko-operasi. Beliau juga menganggotai lembaga beberapa syarikat sendirian berhad.

Pada tarikh laporan tahunan ini, Y. Bhg. Datuk Haji Abdul Razak tidak mempunyai apa-apa kepentingan dalamSinmah. Datuk Haji Abdul Razak telah menghadiri empat (4) daripada lima (5) mesyuarat lembaga dalamtempoh kewangan berakhir 31 Disember 2004.

Y. Bhg. Datuk Haji Abdul Razak was appointed to the Board of Sinmah Resources Berhad ("Sinmah")on 2 August 1996 and later became the Chairman of Sinmah on 24 July 2001. He is the Chairman and themember of the Audit and Nomination Committees and is also a member of the Remuneration Committee ofSinmah.

Y. Bhg. Datuk Haji Abdul Razak completed his secondary education in Tampin, Negeri Sembilan. He wasthe Speaker of the Melaka State Assembly from 1982 to 1986, a member of the Melaka State ExecutiveCommittee from 1978 to 1982 and a State Assemblyman from 1974 to 1986. Since then, he has beenactively involved in welfare activities and is currently holding various positions such as President of theMajlis Bekas Wakil Rakyat (MUBARAK) Malaysia and the Chairman of the Melaka Branch. In addition, he isalso the Chairman of various School Parents & Teachers Associations and Co-operative Societies. He alsosits on the boards of several private limited companies.

As at the date of this annual report, Y. Bhg. Datuk Haji Abdul Razak does not have any interest in Sinmah.Y. Bhg. Datuk Haji Abdul Razak has attended four (4) of the five (5) board meetings held during the financialperiod ended 31 December 2004.

Y. BHG. DATUK HAJI ABDUL RAZAK BIN ALIAS

Pengerusi, Pengarah Bukan EksekutifBebas & Pengerusi Jawatankuasa Audit Chairman, Independent Non-ExecutiveDirector & Chairman of Audit Committee

Berumur 66 tahun – Warganegara Malaysia66 years of age – Malaysian

SINMAH RESOURCES

BERHAD (301653-V)

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Fong Kok Yong dilantik ke Lembaga Sinmah pada 10 Februari 1995 dan pada masa ini adalah PengarahUrusan Sinmah. Beliau juga adalah ahli Jawatankuasa Imbuhan Sinmah.

Fong Kok Yong tamat pengajian dari University of Singapore pada 1975 dengan ijazah Sarjana MudaPentadbiran Perniagaan. Beliau menyertai Sinmah Multifeed Sdn Bhd, sebuah anak syarikat milik penuhSinmah pada 18 Oktober 1976 sebagai Pengarah. Pada masa ini beliau menyelia operasi Kumpulan Sinmah.

Beliau pada masa ini adalah,

(i) Penasihat kepada Persekutuan Persatuan Peladang Ternakan Malaysia (sejak 1995)(ii) Ahli, Panel Pembangunan Pertanian Negara, yang dipengerusikan oleh yang berhormat Menteri

Pertanian dan Industri Berasaskan Tani.(iii) Ahli, Institut Pengurusan Malaysia (sejak 1990)(iv) Ahli, Institut Pertanian Malaysia (sejak 1985)

Fong Kok Yong telah berkhidmat dalam beberapa jawatan/badan dalam tahun-tahun yang lepas:-

(i) Ketua Setiausaha, Persekutuan Persatuan Peladang Ternakan Malaysia (1986 – 1991)(ii) Presiden, Persekutuan Persatuan Peladang Ternakan Malaysia (1991 – 1995) (iii) Presiden, Persekutuan Pengeluar Ayam Itik Asean ( Mac 2003 – Mac 2005)(iv) Pengarah, Dewan Perniagaan dan Industri China Selangor (1991 – 1995)(v) Pengarah, Dewan Perniagaan dan Industri China Melaka (1995 – 2000)

Pada tarikh laporan tahunan ini, Fong Kok Yong mempunyai kepentingan tidak langsung sebanyak20,348,705 saham dalam Sinmah. Beliau telah menghadiri kesemua lima (5) mesyuarat lembaga yangdiadakan pada tempoh kewangan berakhir 31 Disember 2004.

Fong Kok Yong was appointed to the Board of Sinmah on 10 February 1995 and is currently theManaging Director of Sinmah. He is also a member of the Remuneration Committee of Sinmah.

Fong Kok Yong graduated from the University of Singapore in 1975 with a Bachelor of BusinessAdministration. He joined Sinmah Multifeed Sdn Bhd, a wholly owned subsidiary of Sinmah on 18 October1976 as a Director. He presently oversees the Sinmah Group’s operations.

He is currently,

(i) Advisor to the Federation of Livestock Farmers’ Associations of Malaysia (since 1995)(ii) Member, National Agricultural Development Panel, which is chaired by the honourable Minister of

Agriculture and Agro-based Industries(iii) Member, Malaysian Institute of Management (since 1990)(iv) Member, Agricultural Institute of Malaysia (since 1985)

Fong Kok Yong had served in the various positions/bodies during the past years:-

(i) Secretary General, Federation of Livestock Farmers’ Associations of Malaysia (1986 – 1991)(ii) President, Federation of Livestock Farmers’ Associations of Malaysia (1991 – 1995)(iii) President, Federation of Asean Poultry Producers (March 2003 – March 2005)(iv) Director, Selangor Chinese Chamber of Commerce and Industry (1991 – 1995) (v) Director, Malacca Chinese Chamber of Commerce and Industry (1995 to 2000)

As at the date of this annual report, Fong Kok Yong has an indirect interest of 20,348,705 shares in Sinmah.He has attended all five (5) board meetings held during the financial period ended 31 December 2004.

FONG KOK YONGPengarah Urusan/Managing Director

Berusia 54 tahun – Warganegara Malaysia54 years of age – Malaysian


12

Fong Kiah Yeow dilantik ke Lembaga Pengarah Sinmah pada 10 Februari 1995. Beliau juga adalah ahliJawatankuasa Imbuhan Sinmah.

Fong Kiah Yeow tamat kursus perakaunan pada 1975 dari Tottenham College of Technology, UnitedKingdom. Beliau juga pernah menjadi ahli bersekutu Chartered Association of Certified Accountants, UnitedKingdom. Sebaik sahaja, tamat pengajian beliau, Fong Kiah Yeow menyertai perniagaan keluarganya dantelah bertanggungjawab bagi perniagaan penjualan borong beras keluarganya. Beliau kemudiannya telahdilantik ke Lembaga Pengarah Sinmah Multifeed Sdn Bhd pada 31 Januari 1980. Pada masa ini beliaubertanggungjawab bagi hal ehwal korporat dan hal-hal kewangan Kumpulan. Beliau juga menganggotailembaga beberapa syarikat sendirian berhad.

Pada tarikh laporan tahunan ini, Fong Kiah Yeow mempunyai kepentingan tidak langsung sebanyak20,348,705 saham dalam Sinmah. Beliau telah menghadiri kesemua lima (5) mesyuarat lembaga yangdiadakan dalam tempoh kewangan berakhir 31 Disember 2004.

Fong Kiah Yeow was appointed to the Board of Sinmah on 10 February 1995. He is also a member ofthe Remuneration Committee of Sinmah.

Fong Kiah Yeow completed an accountancy course in 1975 from the Tottenham College of Technology,United Kingdom. He was also an associate member of the Chartered Association of Certified Accountants,United Kingdom. Immediately, upon completion of his studies, Fong Kiah Yeow joined his family businessand was responsible for his family’s rice wholesale business. He was later appointed to the Board of SinmahMultifeed Sdn Bhd on 31 January 1980. He is presently responsible for the Group’s corporate affairs andfinancial matters. He also sits on the board of several private limited companies.

As at the date of this annual report, Fong Kiah Yeow has an indirect interest of 20,348,705 shares in Sinmah.He has attended all five (5) board meetings held during the financial period ended 31 December 2004.

FONG KIAH YEOWPengarah Eksekutif/Executive Director


SINMAH RESOURCES

BERHAD (301653-V)

13

Fong Ngan Teng dilantik ke Lembaga Pengarah Sinmah pada 10 Februari 1995. Beliau tamat pengajianpada 1982 dengan ijazah Sarjana Muda Sastera (Kepujian) dari The City of London Polytechnic di UnitedKingdom. Beliau menyertai Sinmah Multifeed Sdn Bhd selepas beliau tamat pengajian dan telah dilantiksebagai Pengarah Sinmah Multifeed Sdn Bhd pada 1 Mac 1983. Pada masa ini beliau adalah PengarahPemasaran Kumpulan dan juga bertanggungjawab bagi pembiakan, penetasan dan perladangan kontrakKumpulan Sinmah. Beliau juga menganggotai lembaga beberapa syarikat sendirian berhad.

Pada tarikh laporan tahunan ini, Fong Ngan Teng mempunyai kepentingan tidak langsung sebanyak20,348,705 saham dalam Sinmah. Beliau telah menghadiri kesemua lima (5) mesyuarat lembaga dalamtempoh kewangan berakhir 31 Disember 2004.

Fong Ngan Teng was appointed to the Board of Sinmah on 10 February 1995. He graduated in 1982with a Bachelor of Arts (Honours) degree from The City of London Polytechnic in United Kingdom. Hejoined Sinmah Multifeed Sdn Bhd upon his graduation and was appointed as a Director of Sinmah MultifeedSdn Bhd on 1 March 1983. He is currently the Group’s Marketing Director and is also responsible for thebreeding, hatchery and contract farming of the Sinmah Group. He also sits on the boards of several privatelimited companies.

As at the date of this annual report, Fong Ngan Teng has an indirect interest of 20,348,705 shares inSinmah. He has attended all five (5) board meetings held during the financial period ended 31 December2004.

FONG NGAN TENGPengarah Eksekutif/Executive Director



14

Fong Choon Kai dilantik ke Lembaga Sinmah pada 10 Februari 1995. Beliau tamat pengajian pada 1985dengan ijazah Sarjana Muda Sains Aktuari (Kepujian) dari London School of Economics, United Kingdomdan kemudiannya pada 1987, dengan ijazah Sarjana dalam Analisis Sistem dan Rekabentuk dari The CityUniversity, United Kingdom. Selepas itu, beliau telah berkhidmat dengan firma perakaunan bertauliahawam, Lewis, Berman & Partners di United Kingdom selama 2 tahun. Sebelum beliau dilantik ke LembagaSinmah Multifeed Sdn Bhd pada 15 Januari 1992, beliau telah terlibat dengan syarikat pembinaan danpembangunan hartanah, Hanover Construction Ltd., serta dalam perniagaan ekspot dan impot HanoverTrading Ltd., United Kingdom selama 2 tahun. Fong Choon Kai pada masa ini bertanggungjawab bagisemua hal-hal pentadbiran dalam Kumpulan Sinmah. Beliau juga menganggotai lembaga beberapa syarikatsendirian berhad.

Pada tarikh laporan tahunan ini, Fong Choon Kai mempunyai kepentingan tidak langsung sebanyak20,348,705 saham dalam Sinmah. Beliau telah menghadiri kesemua lima (5) mesyuarat lembaga yangdiadakan dalam tempoh kewangan berakhir 31 Disember 2004.

Fong Choon Kai was appointed to the Board of Sinmah on 10 February 1995. He graduated in 1985 witha Bachelor of Actuarial Science (Honours) degree from London School of Economics, United Kingdom andlater in 1987, with a Masters degree in Systems Analysis and Design from The City University, UnitedKingdom. Thereafter, he was attached to a public chartered accounting firm, Lewis, Berman & Partners inUnited Kingdom for 2 years. Prior to his appointment to the Board of Sinmah Multifeed Sdn Bhd on 15January 1992, he was engaged in a construction and property development company, HanoverConstruction Ltd, as well as in export and import business of Hanover Trading Ltd, United Kingdom for 2years. Fong Choon Kai is currently responsible for all administrative matters in the Sinmah Group. He alsosits on the boards of several private limited companies.

As at the date of this annual report, Fong Choon Kai has an indirect interest of 20,348,705 shares in Sinmah.He has attended all five (5) board meetings held during the financial period ended 31 December 2004.

FONG CHOON KAIPengarah Eksekutif/Executive Director


SINMAH RESOURCES

BERHAD (301653-V)

15

Ng Cheu Kuan dilantik ke Lembaga Sinmah pada 10 Februari 1995 dan bertanggungjawab bagi operasipembangunan hartanah Kumpulan. Beliau tamat pengajian dengan ijazah Kejuruteraan Awam (Kepujian)dari University of Southampton, United Kingdom pada Julai 1977. Beliau merupakan Jurutera Profesionalberdaftar dengan Lembaga Jurutera, Malaysia dan telah dikurniakan keahlian Fellow Institusi KejuruteraanMalaysia pada 1990, menjadikan beliau ahli Fellow termuda Institusi ketika itu. Beliau juga adalah PengerusiInstitusi Jurutera, Cawangan Melaka dari 1988 hingga 1990. Selepas beliau tamat pengajian pada 1977,beliau menyertai Dewan Bandaraya, Kuala Lumpur sebagai jurutera projek dan pada 1980 beliau menjadijurutera rekabentuk di Angkasa Gutteridge Haskins & Davey Consulting Engineers, Kuala Lumpur, yangmenyediakan perkhidmatan kejuruteraan profesional kepada pelanggan-pelanggan daripada sektor swastadan awam. Pada 1982, beliau menyertai Bolton Properties Berhad sebagai pengurus projek sebelummenjadi pengurus projek dan kemudian pengurus kanan Supreme Corporation Berhad (sekarang dikenalisebagai Lion Land Berhad) selama 10 tahun. Di antara 1992 dan Mei 1994, beliau berkhidmat di Lion LandBerhad. Beliau kemudiannya memulakan perniagaan pembangunan hartanah dan pembinaan sendiri.Beliau juga adalah pengarah beberapa syarikat sendirian berhad.

Pada tarikh laporan tahunan ini, Ng Cheu Kuan memegang 19,000 saham. Beliau telah menghadirikesemua lima (5) mesyuarat lembaga yang diadakan dalam tempoh kewangan berakhir 31 Disember 2004.

Ng Cheu Kuan was appointed to the Board of Sinmah on 10 February 1995 and is in charge of theGroup’s property development operations. He graduated with a degree in Civil Engineering (Honours) fromthe University of Southampton, United Kingdom in July 1977. He is a Professional Engineer registered withthe Board of Engineers, Malaysia and was conferred a Fellow of the Institution of Engineers, Malaysia in1990, making him one of the youngest Fellow of the Institution then. He was also the Chairman of theInstitution of Engineers, Malacca Branch from 1988 to 1990. Upon his graduation in 1977, he joined DewanBandaraya, Kuala Lumpur as the project engineer and in 1980 he became design engineer in AngkasaGutteridge Haskins & Davey Consulting Engineers, Kuala Lumpur, which provides professional engineeringservices to clients from the private and public sectors. In 1982, he joined Bolton Properties Berhad as aproject manager before becoming the project manager and later senior manager of Supreme CorporationBerhad (now known as Lion Land Berhad) for 10 years. Between 1992 and May 1994, he worked in LionLand Berhad. He then started his own property development and construction businesses. He is also adirector of several private limited companies.

As at the date of this annual report, Ng Cheu Kuan holds 19,000 shares in Sinmah. He has attended allfive (5) board meetings held during the financial period ended 31 December 2004.

NG CHEU KUANPengarah Eksekutif/Executive Director



16

Y. Bhg. Datuk Ng Peng Hay @ Ng Peng Hong dilantik ke Lembaga Sinmah pada 10 Februari 1995.Beliau juga adalah ahli Jawatankuasa Audit Sinmah.

Y. Bhg. Datuk Ng Peng Hay adalah Ahli Dewan Undangan Negeri bagi Kawasan Tengkera Barisan Nasionaldi antara 1982 dan 1986. Beliau kemudian berkhidmat sebagai Senator dalam Parlimen Malaysia dari 1987hingga 1993. Penglibatan pertama beliau dalam kegiatan sosial adalah selepas tamat pendidikanmenengah. Beliau telah dilantik sebagai Penyelaras Pelaburan oleh Perbadanan Pembangunan NegeriMelaka untuk mengendalikan pelaburan langsung dalam Negeri Melaka sejak 1988. Bersama denganpasukan pegawai beliau dan hubungan awam beliau yang baik, beliau telah membantu dalam menarikramai pelabur-pelabur Taiwan, Singapura dan Cina ke dalam Negeri Melaka. Sebagai pengiktirafan usahadan dedikasi beliau, beliau telah dianugerahkan Darjah Mulia Seri Melaka oleh Yang Dipertua, GabenorMelaka pada 1992. Pada 17 Julai 1999, Kerajaan Taiwan menganugerahkan beliau Piala Ekonomi. Beliaujuga pada masa ini merupakan seorang ahli Lembaga Dewan Perdagangan dan Perindustrian Cina Melaka,

Y. Bhg. Datuk Ng Peng Hay juga adalah Pengerusi MCA, Cawangan Melaka Ketujuh sejak 1982. Beliaumerupakan Pengarah Bukan Eksekutif Bebas Bonia Corporation (M) Berhad sejak 1994, KomarkcorpBerhad sejak 1997 dan Ta Win Holdings Berhad sejak 2000.

Pada tarikh laporan tahunan ini, Y. Bhg. Datuk Ng memegang 13,500 saham dan juga mempunyaikepentingan tidak langsung sebanyak 100 saham dalam Sinmah. Beliau telah menghadiri empat (4)daripada lima (5) mesyuarat lembaga yang diadakan dalam tempoh kewangan berakhir 31 Disember 2004.

Y. Bhg. Datuk Ng Peng Hay @ Ng Peng Hong was appointed to the Board of Sinmah on 10February 1995. He is also a member of the Audit Committee of Sinmah.

Y. Bhg. Datuk Ng Peng Hay was the State Assemblyman for Tengkera Constituency of Barisan Nasionalbetween 1982 and 1986. He then served as a Senator in the Malaysian Parliament from 1987 to 1993. Hisfirst involvement in social activities was upon completing his secondary education. He has been appointedas the Investment Co-ordinator by the Melaka State Development Corporation to handle direct investmentsin the State of Melaka since 1988. Together with his teams of officials and his excellent public relations, hehas helped in attracting numerous Taiwanese, Singaporean and Chinese investors into the State of Melaka.In recognition of his efforts and dedication, he was conferred the Darjah Mulia Seri Melaka by HisExcellency, the Governor of Melaka in 1992. On 17 July 1999, the Taiwanese Government awarded him theEconomics Medal. He is also presently a Board member of the Melaka Chinese Chamber of Commerceand Industry.

Y. Bhg. Datuk Ng Peng Hay is also the Chairman of MCA, 7th Branch Melaka since 1982. He is also theIndependent Non-Executive Director of Bonia Corporation (M) Berhad since 1994, Komarkcorp Berhadsince 1997 and Ta Win Holdings Berhad since 2000.

As at the date of this annual report, Y. Bhg. Datuk Ng holds 13,500 shares in Sinmah. He has attended four(4) of the five (5) board meetings held during the financial period ended 31 December 2004.

Y. BHG. DATUK NG PENG HAY @ NG PENG HONG

Pengarah Eksekutif/ Executive Director


SINMAH RESOURCES

BERHAD (301653-V)

17

Haji Baharom Bin Abd. Wahab dilantik ke Lembaga Sinmah pada 14 Jun 1999. Beliau juga adalahahli-ahli Jawatankuasa Audit, Penamaan dan Imbuhan Sinmah.

Haji Baharom mendapat sijil mengajar beliau dari Maktab Perguruan Sultan Idris, Tanjung Malim pada 1955.Haji Baharom memulakan kerjaya mengajar beliau sejak 1955 dan telah berada dalam bidang perguruanlebih daripada 35 tahun. Beliau kemudiannya telah dinaikkan pangkat kepada jawatan sebagai guru besarpada 1976 dan memegang jawatan ini sehingga beliau memilih persaraan awal pada 1990. Beliaumenghadiri kursus-kursus bagi “Pentadbiran dan Pengurusan moden bagi Guru-Guru Besar” di UniversitiSains Malaysia Pulau Pinang, pada 1976 dan “Pengurusan dan Kepimpinan Pendidikan” di UniversitiMalaya, Kuala Lumpur pada 1982. Dalam tempoh beliau berkhidmat dengan Kementerian Pendidikan,beliau telah ditugaskan untuk membantu dalam menyelesaikan beberapa krisis untuk beberapa sekolah.Beliau merupakan pengerusi Majlis Guru Besar Melaka Tengah dari 1986 hingga 1990 dan setiausaha bagiPersatuan Perpustakaan Sekolah-Sekolah Melaka dari 1984 hingga 1990. Haji Baharom telah secara aktifterlibat dengan kedua-dua kerja politik dan komuniti sejak awal lagi. Beliau telah dilantik sebagai setiausahaUMNO cawangan Klebang Kecil pada 1962. Dalam sepuluh tahun yang lepas, Haji Baharom telah secaraaktif terlibat dalam koperasi dan telah dilantik sebagai pengarah bagi Koperasi Guru-guru Melayu Melakadari 1986 hingga 1991. Sebagai mengiktiraf sumbangan beliau kepada persatuan, Haji Baharom telahdianugerahkan P.J.K (Pingat Jasa Kebaktian) pada 1985 oleh Yang Dipertua, Gabenor Melaka. Sejakpersaraan beliau pada 1990, Haji Baharom telah dilantik dan menganggotai Lembaga beberapa syarikatsendirian berhad. Beliau juga merupakan bendahari dan naib pengerusi masing-masing untuk Masjid Al-Ehsan Limbongan dan Persatuan Penduduk Taman Anggerik.

Pada tarikh laporan tahunan ini, Haji Baharom memegang 4,500 saham dalam Sinmah. Beliau telahmenghadiri kesemua lima (5) mesyuarat lembaga yang diadakan dalam tempoh kewangan berakhir 31Disember 2004.

Haji Baharom Bin Abd Wahab was appointed to the Board of Sinmah on 14 June 1999. He is also amember of the Audit, Nomination and Remuneration Committees of Sinmah.

Haji Baharom obtained his teaching certificate from Sultan Idris Teachers’ College, Tanjung Malim in 1955.Haji Baharom started his teaching career since 1955 and was in the teaching profession for more than 35years. He was later promoted to the position of headmaster in 1976 and held this position until his optionalretirement in 1990. He attended courses for "Modern Administration and Management for Headmasters" inUniversity Sains Malaysia, Penang, in 1976 and "Management and Leadership in Education" in UniversityMalaya, Kuala Lumpur in 1982. During his attachment with the Ministry of Education, he had beenassigned to assist in solving several crisis for a few schools. He was the chairman for Majlis Guru BesarMelaka Tengah from 1986 to 1990 and a secretary for Persatuan Perpustakaan Sekolah-Sekolah Melakafrom 1984 to 1990. Haji Baharom has been very active in both political and community work since his earlydays. He was elected secretary for UMNO Klebang Kecil branch in 1962. In the past ten years, HajiBaharom was actively involved in the co-operative and was appointed director for Koperasi Guru-GuruMelayu Melaka from 1986 to 1991. In recognition of his contribution to the society, Haji Baharom wasconferred the P.J.K. (Pingat Jasa Kebaktian) in 1985 by His Excellency, the Govenor of Melaka. Since hisretirement in 1990, Haji Baharom was appointed and sits on the Board of several private limited companies.He was also the treasurer and vice chairman for the Masjid Al-Ehsan Limbongan and Persatuan PendudukTaman Anggerik respectively.

As at the date of this annual report, Haji Baharom holds 4,500 shares in Sinmah. He has attended all five (5)board meetings held during the financial period ended 31 December 2004.

HAJI BAHAROM BINABD. WAHAB

Pengarah Bukan Eksekutif Bebas/Independent Non-Executive Director



18

Mohd Khasan Bin Ahmad dilantik ke Lembaga Sinmah pada 10 Januari 2002 Beliau juga adalahPengerusi Jawatankuasa Imbuhan dan ahli-ahli Jawatankuasa Audit dan Penamaan Sinmah. Selaindaripada yang dinyatakan di atas, beliau juga bertindak sebagai Pengarah Bebas Bukan Eksekufif KananLembaga Sinmah.

Mohd Khasan mendapat sijil diploma dalam Perakaunan dan kemudian tamat pengajian dengan ijazahdalam Perakaunan dari Universiti Teknologi Mara. Beliau adalah ahli Institut Akauntan Malaysia (“MIA”).Beliau berkhidmat dengan Bank Negara Malaysia bagi tempoh selama 7 tahun, 2 tahun terakhir yang manabeliau telah berkhidmat dengan Jawatankuasa Terbitan Modal (“CIC”) sebagai Penolong Setiausaha Utama.Kemudiannya, beliau menyertai Suruhanjaya Sekuriti bagi tempoh selama 6 tahun dan jawatan terakhirbeliau adalah sebagai Penolong Pengurus dalam Bahagian Terbitan dan Pelaburan. Semasa memegangjawatan-jawatan di atas, beliau telah terlibat dalam beberapa langkah korporat dari tawaran awam awal,percantuman dan pengambilalihan, pengambilalihan terbalik, penerbitan bon dan lain-lain langkahmendapatkan modal. Beliau menyertai sektor swasta pada 1997 dan memegang beberapa jawatanpengurusan kanan. Mohd Khasan juga menganggotai Lembaga Intan Utilities Berhad dan Ta Win HoldingsBerhad dan Crest Builder Holdings Berhad dan MOL Accessportal Berhad sebagai Pengarah BukanEksekutif. Tambahan ini, beliau juga adalah pengarah Salwan Corporation Berhad.

Pada tarikh laporan tahunan ini, Mohd Khasan tidak mempunyai apa-apa kepentingan dalam Sinmah.Beliau telah menghadiri kesemua lima (5) mesyuarat lembaga yang diadakan dalam tempoh kewanganberakhir 31 Disember 2004.

Mohd Khasan Bin Ahmad was appointed to the Board of Sinmah on 10 January 2002. He is also theChairman of the Remuneration Committee and a member of the Audit and Nomination Committees ofSinmah.

Mohd Khasan obtained a diploma in Accountancy and later graduated with a degree in Accountancy fromUniversity Teknologi Mara. He is a member of the Malaysian Institute of Accountants ("MIA"). He servedBank Negara Malaysia for a period of about 7 years, the last 2 years of which he was seconded to theCapital Issues Committee ("CIC") as its Principal Assistant Secretary. Subsequently, he joined the SecuritiesCommission for a period of about 6 years and his last capacity was an Assistant Manager in its Issues andInvestment Division. During the tenure of his above appointments, he was involved in various corporateexercises ranging from initial public offerings, mergers and acquisitions, reverse take-overs, issuance ofbonds and other capital raising exercises. He joined the private sector in 1997 and held various seniormanagement positions. Mohd Khasan also sits on the Board of Intan Utilities Berhad, Ta Win HoldingsBerhad, Crest Builder Holdings Berhad and MOL Accessportal Berhad as a Non-Executive Director. Inaddition, he is also a director in Salwan Corporation Berhad.

As at the date of this annual report, Mohd Khasan does not have any interest in Sinmah. He has attendedall five (5) board meetings held during the financial period ended 31 December 2004.

MOHD KHASAN BIN AHMAD

Pengarah Bukan Eksekutif Bebas/ Independent Non-Executive Director


SINMAH RESOURCES

BERHAD (301653-V)

19

MAKLUMAT TAMBAHAN

(i) Percanggahan kepentingan

Tiada pengarah mempunyai apa-apa percanggahan kepentingan dengan Syarikat.

(ii) Perhubungan keluargaan dengan mana-mana Pengarah dan/atau Pemegang SahamUtama

Tiada pengarah mempunyai apa-apa perhubungan keluargaan dengan mana-mana Pengarahdan/atau pemegang saham utama Syarikat kecuali bagi Fong Kok Yong, Fong Kiah Yeow, Fong NganTeng dan Fong Choon Kai yang merupakan adik-beradik.

(iii) Sabitan bagi Kesalahan (dalam 10 tahun yang lepas, selain daripada kesalahantrafik)

Kecuali bagi Fong Kok Yong, Fong Kiah Yeow, Fong Ngan Teng dan Fong Choon Kai, tidak adaPengarah mempunyai apa-apa sabitan bagi apa-apa kesalahan selain daripada kesalahan trafik. Pada11 Disember 2001, Fong Kok Yong, Fong Kiah Yeow, Fong Ngan Teng dan Fong Choon Kai telah diberiamaran secara awam oleh Suruhanjaya Sekuriti di bawah Seksyen 32 Akta Suruhanjaya Sekuriti 1993bagi ketiadaan pematuhan cadangan terbitan hak Sinmah.

ADDITIONAL INFORMATION

(i) Conflict of interest

None of the Directors have any conflict of interest with the Company.

(ii) Family Relationship with any Director and/or Major Shareholder

None of the Directors have family relationship with any Director and / or major shareholder of thecompany except for Fong Kok Yong, Fong Kiah Yeow, Fong Ngan Teng and Fong Choon Kai who arebrothers.

(iii) Conviction for offences (within the past 10 years, other than traffic offences)

Except for Fong Kok Yong, Fong Kiah Yeow, Fong Ngan Teng and Fong Choon Kai, none of thedirectors have any convictions for any offences other than traffic offences. On 11 December 2001,Fong Kok Yong, Fong Kiah Yeow, Fong Ngan Teng and Fong Choon Kai were publicly reprimanded bythe Securities Commission under Section 32 of the Securities Commission Act 1993 for the non-completion of Sinmah’s proposed rights issue.

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22

penyata pengerusichairman’s statement

BAGI PIHAK LEMBAGA PENGARAH KUMPULAN SYARIKATSINMAH RESOURCES BERHAD ("KUMPULAN"), SAYADENGAN SUKACITA MEMBENTANGKAN KEPADA ANDALAPORAN TAHUNAN DAN PENYATA KEWANGANBERAUDIT KUMPULAN BAGI TEMPOH KEWANGANBERAKHIR 31 DISEMBER 2004.

ON BEHALF OF THE BOARD OF DIRECTORS OF SINMAHRESOURCES BERHAD GROUP OF COMPANIES ("THEGROUP"), I AM PLEASED TO PRESENT TO YOU THEANNUAL REPORT AND AUDITED FINANCIALSTATEMENTS OF THE GROUP FOR THE FINANCIALPERIOD ENDED 31 DECEMBER 2004.

DATUK HAJIABDUL RAZAK BIN ALIASPengerusi/Chairman

SINMAH RESOURCES

BERHAD (301653-V)

23

TINJAUAN PRESTASI

PengenalanBagi tempoh kewangan yang ditinjau, Kumpulan telahberjaya mencapai perolehan sebanyak RM341.8 juta,meningkat hampir 7.0% berbanding perolehan yangdilaporkan pada tahun kewangan sebelumnya sebanyakRM319.7 juta. Tempoh kewangan berakhir 31 Disember2004 adalah bergitu mencabar bagi Kumpulan secarakeseluruhan. Walaupun perolehan bagi tempoh 11 bulanberakhir 31 Disember 2004 adalah lebih tinggi berbandingtahun kewangan yang lepas, namun Kumpulan telahmencatat kerugian selepas cukai dan kepentingan minoritisebanyak RM33.51 juta berbanding keuntungan bersihselepas cukai dan kepentingan minoriti sebanyak RM7.24juta bagi tahun kewangan berakhir 31 Januari 2004. Inibermakna kerugian sesaham adalah sebanyak 66.32 senbagi tempoh kewangan yang ditinjau berbandingpendapatan sesaham sebanyak 14.33 sen pada tahunkewangan sebelumnya.

Operasi Penternakan BersepaduKumpulan memulakan tempoh kewangan yang ditinjaudalam keadaan yang amat mencabar. Kumpulan telahdilanda keadaan di mana harga bagi bahan makananternakan mentah diimport seperti makanan ternakan jagungdan kacang soya meningkat sepanjang tempoh kewanganyang ditinjau. Ini memberi kesan kepada asas keteguhanKumpulan apabila kos pengeluaran terus meningkat.

Keadaan yang telah sedia lembap disebabkan oleh hargamelambung bagi bahan makanan ternakan mentah yangdiimport telah menjadi semakin buruk apabila industripenternakan di negara-negara jiran seperti Thailand,Vietnam, Indonesia dan Kemboja dilaporkan telah dilandaoleh penyakit Avian Influenza yang boleh membawa mautatau lebih dikenali sebagai penyakit selesema burung.Berita wabak selesema burung di negara-negara jiran itutelah memberi pandangan negatif kepada masyarakatpengguna tempatan berhubung penggunaan produk-produk penternakan. Ini telah menyebabkan permintaanbagi produk penternakan jatuh dengan teruk lantasmenurunkan harga jualan di bawah kos pengeluaran.

Apabila Kumpulan memasuki suku tahun kedua padatempoh kewangan yang ditinjau, keyakinan para penggunakembali pulih dan permintaan untuk produk penternakanturut meniningkat dengan ketara hasil daripada harga yanglebih baik untuk produk-produk penternakan. Kumpulanturut memperolehi manfaat daripada sekatan eksport yangdikenakan oleh beberapa negara terhadap produkperternakan dari Thailand disebabkan oleh wabak selesemaburung di sana. Kesan daripada keadaan ini, Sinmah FoodIndustries Sdn Bhd berpeluang mengeksport kontenapertamanya yang mengandungi produk-produk telahdiproses ke negara Jepun pada bulan Mac 2004.

PERFORMANCE REVIEW

IntroductionFor the financial period under review, the Group achievedturnover of RM341.8 million, an increase of nearly 7.0%when compared to the turnover of RM319.7 million reportedin the previous financial year. The financial period ended 31December 2004 was a very challenging one for the Groupas a whole. Although the turnover for the 11 months periodended 31 December 2004 was higher than the previousfinancial year, the Group reported a loss after taxation andminority interest of RM33.51 million as opposed to a netprofit after taxation and minority interest of RM7.24 millionfor the financial year ended 31 January 2004. Thistranslates to a loss per share of 66.32 sen for the financialperiod under review as opposed to earnings per share of14.33 sen in the preceding financial year.

Integrated Poultry OperationsThe Group entered into the financial period under review invery trying circumstances. The Group was hit with thesituation of mounting prices of imported raw feedstuffs suchas corn and soya bean meal throughout the entire financialperiod under review. This had caused a major strain on theGroup’s bottom line as production costs continued rising.

The already dampened situation brought about by themounting prices of imported raw feedstuffs was made worstas the poultry industry in the neighbouring countries suchas Thailand, Vietnam, Indonesia and Cambodia werereported to be infected by the deadly Avian Influenzadisease which is better known as the bird flu disease. Thenews of the outbreak of bird flu in the neighbouringcountries gave the local consuming public a negativeperception on poultry products consumption. This hadcaused the demand for poultry products to fall drasticallythus plunging the selling prices below the cost ofproduction.

As the Group entered into the second quarter of the financialperiod under review, consumers’ confidence had returnedand demand for poultry products had improved significantlyresulting in better prices for poultry products. The Grouphad also benefited from the export ban imposed by manyimporting countries on poultry products from Thailand due tothe bird flu outbreak there. As a result of this, Sinmah FoodIndustries Sdn Bhd was able to export its first container ofprocessed products to Japan in March 2004.


24

Dalam pada permintaan dan harga bagi produkpenternakan baru sahaja menunjukkan tanda-tanda untukpulih apabila Kumpulan memasuki suku tahun ketigatempoh kewangan ini, berita wabak selesema burung telahdilaporkan pula di Kelantan pada bulan Ogos 2005.Natijahnya, Kumpulan terpaksa menghadapi tempoh yangpaling mencabar dalam sejarah Kumpulan disebabkan olehindustri penternakan Malaysia yang sememangnya telahdilanda masalah harga bahan makanan ternakan mentahdiimport yang tinggi, kini terpaksa berhadapan dengankesan berita wabak selesema burung di negeri Kelantan. Inimenyebabkan Kumpulan kehilangan semua hasileksportnya secara serta-merta dalam dua bulan pertamasuku tahun ketiga yang telah membawa kepada kerugianselepas cukai dan kepentingan minoriti paling tinggi pernahdicatat oleh Kumpulan sebanyak RM23.45 juta, hanya bagisuku tahun ketiga sahaja. Wabak selesema burung yangdilaporkan di negeri Kelantan sekali lagi telah menyebabkanpermintaan dan harga tempatan bagi produk penternakanmenjunam turun. Namun begitu, dengan usahasama dankerjasama erat antara Malaysia dan Lembaga MakananPertanian dan Veterinari Singapura (AVA), pada bulanOktober 2004, kerajaan Singapura telah membuka semulapintu negara tersebut untuk import ayam daging hidup dariladang-ladang ternakan yang diakreditasi oleh AVA dinegeri Johor dan Melaka.

Pada suku akhir tempoh kewangn ini, Kumpulan teahmenukar akhir tahun perakaunannya dari 31 Januari 2005ke 31 Disember 2004 agar selaras dengan akhir tahunkewangan syarikat induknya, F.C.H. Holdings Sdn Bhd.Dalam pada itu, harga bagi bahan makanan ternakanmentah diimport telah turun sedikit dan permintaan bagiproduk penternakan terus meningkat. Harga purata keluardari pusat penternakan bagi ayam daging telah meningkatdan ini menghasilkan keputusan yang lebih baik bagi sukutahun terakhir berbanding suku tahun sebelumnya.Kumpulan mencatat keuntungan selepas cukai dankepentingan moniriti sebanyak RM1.07 juta pada sukutahun akhir tersebut.

Pembangunan PerumahanBahagian pembangunan perumahan terus memberisumbangan positif dalam tempoh kewangan semasadengan mencatat perolehan sebanyak kira-kira RM24 juta,satu peningkatan ketara berbanding RM15 juta yang dicatatpada tahun sebelumnya.

Just as the demand and prices of poultry products hadshown signs of recovering as the Group enters into the thirdquarter of the financial period, the news of outbreak of birdflu was reported in the state of Kelantan in August 2005. Asa result, the Group had to face one of the most challengingtimes in the Group’s history, as the Malaysian poultryindustry which was already hit by high prices of importedraw feedstuffs, had to contend with the impact of the newsof bird flu outbreak in the State of Kelantan. This causedthe Group to immediately lose all its export revenues in thefirst two months of the third quarter resulting in the Groupreporting a record loss after taxation and minority interestsof RM23.45 million for the third quarter itself. The outbreakof bird flu reported in the state of Kelantan had once againcaused the domestic demand and prices for poultryproducts to dwindle downwards. However, with closecollaboration and co-operations between Malaysian Ministryof Agriculture and our Department of Veterinary Services(DVS) in Malaysia and Singapore’s Agri-food and VeterinaryAuthority of Singapore (AVA), the Singapore governmenthad, in October 2004, re-opened its doors to the importationof live-broilers from AVA accredited farms in the states ofJohore and Malacca.

During the final quarter of this financial period, the Grouphad changed its accounting year-end from 31 January 2005to 31 December 2004 to be co-terminous with its holdingcompany, F.C.H. Holdings Sdn Bhd year end. Meanwhile,the prices of imported raw feedstuffs had softened anddemand for poultry products continued rising. The averagefarm-gate price of broilers had increased and this hadresulted in a better set of results for the final quarter than inthe preceding quarter. The Group reported a profit aftertaxation and minority interests of RM1.07 million in the finalquarter.

Housing Development The housing development division continued to contributepositively in the current financial period as it reported aturnover of about RM24 million, a significant increase ifcompared to the RM15 million achieved in the precedingfinancial year.

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Bahagian pembangunan hartanah di bawah SinmahDevelopment Sdn Bhd ("S/Dev") telah melancarkan TamanSaujana Indah (Fasa 1) pada tahun-tahun kewangan lepasyang mengandungi 578 unit rumah kediaman. Daripadajumlah unit yang disediakan, 398 unit adalah rumahsetingkat dan dua tingkat di mana 92% daripada unit-unityang dilancarkan telah dijual dengan kerja-kerja pembinaanselesai sepenuhnya; 186 unit adalah rumah bandar kosrendah dan kos sederhana di mana 100% daripada unityang dilancarkan telah habis dijual dengan kerja-kerjapembinaan diselesaikan sepenuhnya. 66 unit rumah teresdijangka akan dilancarkan pada tahun kewangan yang akandatang. Ini akan mempunyai nilai pembangunan kasar("GDV") sebanyak RM8.0 juta.

Cosmal Enterprise Sdn Bhd ("Cosmal"), anak syarikat S/Dev,telah melancarkan Taman Saujana Indah (Fasa II),bersebelahan dengan Fasa 1 pada tahun-tahun kewanganlepas yang meliputi 350 unit rumah kediaman. Daripadajumlah unit yang disediakan, 56 unit adalah rumahberkembar di mana 85% daripada unit-unit tersebut telahdijual dan 80% dijual dengan kerja-kerja pembinaandiselesaikan sepenuhnya. Cosmal, sebagai sebahagiandaripada tanggungjawab sosialnya, turut memperuntukkan106 unit rumah kos rendah dalam projek mereka di mana74% daripada unit-unit tersebut telah dijual, manakala 69%telah dijual dengan kerja-kerja pembinaan diselesaikansepenuhnya. Pada tempoh kewangan ini, Cosmal telahmelancarkan 46 unit rumah teres dua tingkat di mana 54%daripadanya telah dijual dengan 52% kerja-kerjapembinaan disiapkan. Cosmal dijangka akan melancarkanbaki 25 unit rumah teres dua tingkatnya yang mempunyaiGDV sebanyak RM4.8 juta pada tahun kewangan akan datang.

Penyatuan dan Pengurusan Pekebun Kecil GetahPengurusan operasi pekebun kecil getah Kumpulan telahmula mencatat keuntungan pada suku tahun ketiga danterakhir tempoh kewangan ini. Ini sebahagian besarnyadisebabkan oleh pertambahan keluasan, hasil dan jugaharga getah pada tempoh kewangan yang ditinjau.

Jumlah keluasan yang ditoreh pada tempoh kewanganyang ditinjau bertambah berbanding dengan tahunkewangan sebelumnya. Ini sebahagian besarnyadisebabkan oleh kawasan baru yang diperolehi padatempoh kewangan ini, iaitu Ladang Sabai di Karak.

The property development division under SinmahDevelopment Sdn Bhd ("S/Dev") had launched TamanSaujana Indah (Phase 1) in the previous financial yearsconsisting of 578 units of residential houses. From the totalunits available, 398 units are single and double storeyhouses where 92% of the units launched have been soldwith work fully completed; 186 units are low cost andmedium cost townhouses of which 100% of units launchedhave been sold with work fully completed. 66 units ofterrace houses are expected to be launched in the comingfinancial year. This will have a gross development value("GDV") of RM8.0 million.

S/Dev’s subsidiary, Cosmal Enterprise Sdn Bhd ("Cosmal"),launched the adjacent Taman Saujana Indah (Phase II) inthe previous financial years consisting of 350 units ofresidential houses. From the total units available, 56 unitsare semi-detached houses where 98% of the units havebeen sold with work fully completed; 117 units of singlestorey terrace houses where 85% of the units have beensold, of which 80% sold with work fully completed. Cosmal,as part of their social obligation have also allocated 106units of low cost houses in their project where 74% of theunits have been sold, of which 69% have been sold withwork fully completed. During the financial period, Cosmallaunched 46 units of double storey terrace houses where54% of the units have been sold with 52% work completed.Cosmal is expected to launch the remaining 25 units ofdouble storey terrace houses in the coming financial yearwhich have a GDV of RM4.8 million.

Consolidation and Management of RubberSmallholdingsThe Group’s management of rubber smallholders’operations has begun to turn in profits during the third andthe final quarters of the financial period. This is mainly dueto increases in the acreage, yield and also rubber pricesduring the financial period under review.

Total acreage tapped during the financial period underreview increased compared to that during the preceedingfinancial year. This was mainly brought about by a new areaobtained during the financial period namely, Sabai Estate inKarak.


26

PELAKSANAAN KORPORAT

Kumpulan terus mengambil langkah mengurangkankedudukan penggearannya. Selepas berakhir tempohkewangan yang ditinjau, Kumpulan telah memeteraiperjanjian jual beli untuk menjual tanah dan ladangpenternakan ayam dagingnya yang tertentu dengan nilaisebanyak RM5.0 juta. Penjualan ini telah diumumkankepada Bursa Sekuriti pada 24 Mac 2005. Penjualantersebut dijangka akan menghasilkan pendapatan modalkepada Kumpulan sebanyak kira-kira RM0.43 juta bagitahun kewangan berakhir 31 Disember 2005. Kutipan darijualan ini akan digunakan untuk mengurangkan pinjamanbank Kumpulan. Ini adalah sejajar dengan objektifKumpulan untuk menangani masalah penggearannya yangtinggi.

Sementara itu, untuk memastikan bekalan ayam dagingtidak terganggu yang mana amat penting kepada operasi,Kumpulan akan memeterai perjanjian pajakan selama 10tahun, selepas Perjanjian Jual Beli diselesaikan, denganPembeli ladang-ladang penternakan ayam daging tersebutuntuk menyewakannya bagi kegunaan kontrak penternakanayam daging kami.

MEMANDANG KE HADAPAN

Pada 4 Januari 2005, Kementerian Pertanian Malaysia telahmengumumkan bahawa negara adalah bebas daripadaselesema burung dan produk-produk penternakan ayamboleh dieksport. Dengan penurunan harga bahan makananternakan mentah serta pengukuhan permintaan bagi produkpenternakan di negara kita, unjuran bagi industripenternakan pada tahun yang akan datang dijangka baik.Keadaaan pasaran pada masa ini telah pulih sejak akhirtempoh kewangan yang ditinjau. Kumpulan berkeyakinanapabila memasuki tahun kewangan baru dengan keyakinanorang ramai terhadap penggunaan produk perternakankembali pulih. Dengan situasi selesema burung di negarakita berada di bawah kawalan sementara negara-negaralain seperti Thailand dan Vietnam masih bergelut untukmengatasi kesan wabak selesema burung di negaramasing-masing, Kumpulan yakin bahawa permintaan bagiproduknya akan kekal memberangsangkan.

Kumpulan juga turut berusaha meningkatkan bahagianpasarannya dalam pasaran eksport terutamnya di AsiaTenggara kerana kebanyakan perniagaan penternakan dinegara-negara jiran telah dilumpuhkan oleh seranganpenyakit selesama burung tersebut. Salah sebuah daripadanegara pengeksport utama di Asia Tenggara iaitu Thailand

CORPORATE EXERCISE

The Group is continuously taking steps to reduce its gearingposition. Subsequent to the end of the financial periodunder review, the Group entered in sale and purchaseagreements to sell off certain of its land and broiler farms fora consideration of RM5.0million. These disposals were dulyannounced to the Bursa Securities on 24 March 2005. Thesaid disposals are expected to result in a capital gain to theGroup of about RM0.43 million for the financial year ending31 December 2005. The proceeds from these sales wouldbe utilized to reduce the Group’s bank borrowings. This is inline with the Group’s objective to address its high gearingproblem.

Meanwhile, in order to ensure an uninterrupted broilersupply which is crucial to our Group’s operations, the Groupwill enter into a 10-years long term lease agreement, uponcompletion of the Sale & Purchase Agreements, with thePurchaser of these broiler farms to rent these broiler farmsfor our contract broiler rearing purposes.

LOOKING FORWARD

On 4 January 2005, the Ministry of Agriculture of Malaysiahad declared that the country is bird-flu free and chickenpoultry products can be exported. With the softening of theprices of raw feedstuffs coupled with the strengthening ofthe demand for the poultry products in our country, theoutlook for poultry industry in the coming year looks good.The current market condition has improved since the end ofthe financial period under review. The Group is optimisticas it starts the new financial year with renewed publicconfidence towards consumption of poultry products. Withthe bird flu situation in the country very much under controlwhilst other countries such as Thailand and Vietnam are stillstruggling to overcome the impact of the bird flu outbreak intheir respective countries, the Group is confident thatdemand for its products will remain vibrant.

Meanwhile, the Group is also working towards increasing itsmarket share in the export market especially in South EastAsia as most of the poultry business in neighbouringcountries had been crippled by the deadly bird flu disease.One of the major exporting countries in South East Asia,namely Thailand had also been badly hit by the deadly bird

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juga dilanda dengan teruk oleh wabak tersebut. Kesannya,Thailand telah disekat daripada mengeksport produk ayammentah yang telah diproses ke beberapa negara di dunia.

Ringkasnya, tahun kewangan akan datang dijangka akanmenjadai satu tahun yang baik bagi operasi penternakanKumpulan dan Kumpulan percaya bahawa permintaan yangkukuh untuk produk penternakannya akan berterusan untukjangka masa yang agak panjang.

Berhubung usahasama ("JV") perniagaan pengurusanpekebun kecil getah, Kumpulan akan terus mencarikawasan-kawasan baru untuk ditoreh dengan mengadakanlebih banyak perbincangan dengan pekebun kecil bagimeningkatkan keluasan pengeluaran pada tahun kewanganakan datang. Dengan harga yang teguh pada masa ini bagigetah mentah, Kumpulan menjangka segmen perniagaanini akan memberi sumbangan positif kepada asasKumpulan pada tahun kewangan akan datang.

Sementara itu, Kumpulan menjangka bahagian hartanahakan terus menyumbang pada tahun kewangan yang akandatang. Kumpulan kini dalam proses mengenalpastibeberapa kawasan tanah simpanan dan sedang berusahamencari jalan untuk membangunkan kawasan-kawasantersebut.

Secara keseluruhannya, tahun kewangan akan datangmenjanjikan satu tahun yang baik bagi Kumpulan keranaoperasi perternakan dijangka akan menyumbangkankeputusan positif bersama-sama dengan jangkaansumbangan positif dari bahagian hartanahnya danperniagaan JV pengurusan pekebun kecil getah.

PENGHARGAAN

Bagi pihak Lembaga Pengarah, saya ingin mengambilpeluang ini untuk mengucapkan ribuan terima kasih kepadapara pekerja, pengurusan dan kakitangan kami, parapelanggan, pembekal, bank-bank dan para pemegangsaham kami atas sokongan berterusan mereka.Penghargaan tulus ikhlas juga ingin kami sampaikankepada Kerajaan Negeri Melaka, Jabatan PerkhidmatanVeterinari, Kementerian Pertanian, MITI, MIDA, JabatanImigresen dan kementerian-kementerian serta agensi-sgensi lain atas panduan dan bantuan mereka.

flu disease. As a result, Thailand had been banned fromexporting its raw processed chicken products to manycountries in the world.

In short, the coming financial year is expected to be a goodone for the Group’s poultry operations and the Groupbelieves that strong demand for its poultry products willcontinue for sometime.

In respect to the joint venture ("JV") business of rubbersmallholdings management, the Group will continue to lookfor new areas to tap by having more discussions withrubber smallholders in order to increase its productionacreage during the next financial year. With the currentbuoyant prices of raw rubber, the Group expects thisbusiness segment to contribute positively to the Group’sbottom line in the coming financial year.

Meanwhile, for the property division, the Group expects thisdivision to continue contributing into the next financial year.The Group is in the process of identifying some new landbanks and is in the process of looking into ways ofdeveloping these areas.

Overall, the next financial year promises to be a good yearfor the Group as its poultry operations expect to turn in apositive set of results coupled by an anticipated positivecontribution from its property division and its JV business ofrubber smallholdings management.

ACKNOWLEDGEMENT

On behalf of the Board, I wish to take this opportunity tothank our employees, management and staff, customers,suppliers, bankers and shareholders for their continuedsupport. Our deepest appreciation also goes to the StateGovernment of Melaka, Department of Veterinary Services,the Agriculture Ministry, MITI, MIDA, ImmigrationDepartment and other ministries and agencies for theirguidance and assistance.

Terima kasih,Thank you,

DATUK HAJI ABDUL RAZAK BIN ALIASPengerusi/Chairman

satisfaction

Customer satisfaction enhances brand loyalty. Once lost, it’s difficult to regain. Don’t let

people tell you otherwise. That’s why it has always remained a top priority of ours. It

helps drives us constantly to introduce a product line that reflects the changing taste

preferences of consumers, and provides the assurance of always serving their families

fresh, high quality chicken. Simply stated, our customers know that the Farm’s Best brand

stands for quality, trust and total satisfaction

Kepuasan pelanggan meningkatkan kesetiaan jenama. Sekali hilang, amat sukar untuk

mendapat balik. Jangan biarkan orang lain bagi tahu anda sebaliknya. Itulah sebabnya

ia sentiasa menjadi keutamaan teratas kami. Ia membantu mendorong kami untuk

sentiasa memperkenalkan barisan produk yang menggambarkan keutamaan selera

pengguna yang sentiasa berubah, dan menyediakan jaminan sentiasa menyajikan

keluarga mereka ayam segar, berkualiti tinggi. Dalam perkataan, pelanggan kami tahu

bahawa jenama Farm's Best bermaksud kualiti, kepercayaan dan kepuasan keseluruhan.

guaranteedkepuasan dijamin


30

penyata tadbir urus korporat

dan bebas, untuk mengambil kira bukan sahajakepentingan Kumpulan, tetapi juga kepentinganpemegang saham, kakitangan, pelanggan danbanyak komuniti dalam mana Kumpulanmenjalankan perniagaannya. Syarikat mengiktirafsumbangan Pengarah bukan eksekutif samaseperti ahli Lembaga ke arah pembangunanstrategi Syarikat, menjaga kepentinganpemegang-pemegang saham awam danmenyediakan pandangan yang seimbang danbebas kepada Lembaga. Kesemua Pengarahbukan eksekutif adalah bebas daripadapengurusan dan tidak terikat dengan apa-apaperhubungan yang boleh mengganggupembuatan keputusan bebas mereka.

Pengarah Bukan Eksekutif menyumbang secaraketara dalam bidang-bidang seperti polisi danstrategi, pengawasan prestasi, peruntukansumber, serta juga mempertingkatkan urus tadbirdan kawalan. Encik Mohd Khasan Bin Ahmadbertindak sebagai Pengarah Bebas BukanEksekutif Kanan Lembaga kepada siapa dimanaapa-apa kebimbangan boleh dikemukakan.

1.2 Mesyuarat Lembaga

Lembaga bermesyuarat sekurang-kurangnyaempat (4) kali setahun dan mesyuarat tambahandiadakan pada dan apabila diperlukan. Ianyabermesyuarat dua (2) bulan selepas akhir setiapsuku tahunan kewangan, dimana, keputusankewangan suku tahunan Kumpulan Sinmah akandibincang dan dipertimbangkan.

Dalam tempoh kewangan berakhir 31 Disember2004, Lembaga bermesyuarat sebanyak lima (5)kali. Butir-butir kehadiran adalah seperti berikut:

Lembaga Pengarah komited untuk memastikan agarstandard tertinggi urus tadbir korporat diamalkan padaseluruh peringkat di Sinmah Resources Berhad (“Sinmah”)dan Kumpulan anak-anak syarikatnya sebagai sebahagianpenting dalam melaksanakan tanggungjawabnya untukmengawal dan mengukuhkan nilai pemegang saham danprestasi kewangan Kumpulan.

Lembaga Pengarah dengan sukacitanya melaporkankepada pemegang-pemegang saham mengenai caraKumpulan mengamalkan prinsip-prinsip, dan tahappematuhan amalan dan urus tadbir terbaik sebagaimanadikemukakan dalam Bahagian 1 dan Bahagian 2 KodMalaysia mengenai Urus Tadbir Korporat (“Kod”).

1. LEMBAGA PENGARAH

1.1 Lembaga

Sinmah diketuai dan diuruskan oleh Lembagayang berpengalaman terdiri daripada ahli denganpelbagai pengalaman dalam bidang yang relevanseperti penternakan, pentadbiran perniagaan,perancangan, pembangunan dan pemasaran.Lembaga terdiri daripada sembilan (9) orang ahli.

Tiga (3) daripada sembilan (9) orang ahliLembaga adalah Pengarah bukan eksekutifbebas. Dengan yang demikian, satu pertiga (1/3)daripada Lembaga terdiri daripada Pengarahbukan eksekutif bebas. Kehadiran Pengarah-pengarah bukan eksekutif bebas memenuhiperanan penting dalam kebertanggungjawapankorporat. Sungguhpun semua Pengarahmempunyai tanggungjawab yang sama terhadapKumpulan, peranan Pengarah-pengarah bukaneksekutif bebas ini secara khususnya pentingmemandangkan mereka menyediakan pandangannasihat dan pemikiran yang tidak berat sebelah

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1.4 Pelantikan Semula Para Pengarah

Selaras dengan Tataurusan Pertubuhan Syarikat,satu pertiga (1/3) atau hampir dengan satu pertiga(1/3) daripada para Pengarah yang pada masa iniakan bersara daripada jawatannya dan menjadilayak untuk Pelantikan Semula dengan syarattetap bahawa semua para Pengarah hendaklahbersara daripada jawatan mereka sekurang-kurangnya sekali dalam setiap tiga (3) tahun tetapiadalah layak untuk Pelantikan Semula. Mana-manaorang yang dilantik oleh Lembaga samaada untukmengisi kekosongan biasa atau sebagaitambahan kepada para Pengarah sedia ada, akanmemegang jawatan hanya sehingga mesyuaratagung tahunan yang akan datang dan akanselepas itu layak untuk Pelantikan Semula.

2. JAWATANKUASA LEMBAGA

Jawatankuasa Lembaga berikut telah ditubuhkan untukmembantu Lembaga dalam penyempurnaantanggungjawab mereka. Semua Jawatankuasadisenaraikan di bawah tidak mempunyai kuasaeksekutif tetapi akan melapor kepada Lembaga bagisemua perkara yang dipertimbangkan danmengemukakan pengesyoran untuk kelulusanLembaga (kecuali kuasa Jawatankuasa Audit untukmelaporkan kepada Bursa Malaysia Securities Berhad(“Bursa Sekuriti”) dalam keadaan-keadaan yangditerangkan dalam Laporan Jawatankuasa Audit):

1.3 Bekalan Maklumat

Semua Pengarah disediakan dengan agenda dansatu set kertas Lembaga tujuh (7) hari sebelummesyuarat Lembaga bagi membolehkan paraPengarah mendapat maklumat atau peneranganlanjut, apabila diperlukan, untuk diberipenerangan ringkas sewajarnya sebelummesyuarat. Minit-minit mesyuarat Lembaga yangsebelumnya juga diedarkan kepada Pengarah dandisahkan pada setiap mesyuarat. Minit-minitmesyuarat Lembaga disimpan oleh SetiausahaSyarikat.

Terdapatnya jadual mengenai perkara-perkarayang secara khususnya dirizab untuk keputusanLembaga, termasuk keputusan kewanganKumpulan Sinmah, rancangan perniagaan, arahtuju Kumpulan, pelaburan baru dan cadanganperniagaan, pengurusan atau prestasi perniagaananak-anak syarikat, rancangan korporat danbelanjawan tahunan, pengambilalihan danpelupusan usahaniaga dan hartanah yangmempunyai nilai yang besar, pelaburan utama dankeputusan kewangan, perubahan kepadapengurusan dan struktur kawalan dalamKumpulan, termasuk polisi dan prosedur pentingdan had kuasa budi bicara.

Pengarah mendapat nasihat profesional bebasdalam melanjutkan tugas-tugas mereka, atasperbelanjaan Syarikat dan semua Pengarahmempunyai akses kepada nasihat dan khidmatSetiausaha Syarikat dalam membantumenjalankan tugas-tugas mereka.

Bil. Mesyuarat LembagaNo. Pengarah Jawatan yang Dihadiri

1 Y. Bhg. Datuk Haji Abdul Razak Bin Alias Pengerusi, Pengarah 4 daripada 5Bukan Eksekutif Bebas

2 Fong Kok Yong Pengarah Urusan 5 daripada 53 Fong Kiah Yeow Pengarah Eksekutif 5 daripada 54 Fong Ngan Teng Pengarah Eksekutif 5 daripada 55 Fong Choon Kai Pengarah Eksekutif 5 daripada 56 Ng Cheu Kuan Pengarah Eksekutif 5 daripada 57 Y. Bhg. Datuk Ng Peng Hay @ Ng Peng Hong Pengarah Eksekutif 4 daripada 58 Tuan Haji Baharom Bin Abd. Wahab Pengarah Bukan 5 daripada 5

Eksekutif Bebas9 Mohd Khasan Bin Ahmad Pengarah Bukan 5 daripada 5

Eksekutif Bebas


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2.1 Jawatankuasa Audit

Jawatankuasa Audit mengkaji isu-isu polisiperakaunan dan pembentangan bagi pelaporankewangan luar, mengawasi fungsi audit dalamandan memastikan objektif dan hubunganprofesional dikekalkan dengan juruaudit luar.Jawatankuasa mempunyai akses penuh kepadajuruaudit, yang sebaliknya, mempunyai aksespada sepanjang masa kepada PengerusiJawatankuasa.

Bidang tugas Jawatankuasa Audit dinyatakanpada muka surat-muka surat 46 hingga 48Laporan Tahunan. Kegiatan Jawatankuasa Auditdalam tempoh berakhir 31 Disember 2004 jugadibentangkan di bawah Laporan JawatankuasaAudit.

2.2 Jawatankuasa Imbuhan Pengarah

Jawatankuasa Imbuhan bagi tempoh kewanganberakhir tahun 31 Disember 2004 adalah terdiridaripada seperti berikut:

No. Pengarah Jawatan

1 Mohd Khasan Pengerusi, Pengarah Bin Ahmad Bebas Bukan Eksekutif

2 Y. Bhg. Datuk Haji Pengarah Bebas Abdul Razak Bukan EksekutifBin Alias

3 Tuan Haji Baharom Pengarah Bebas Bin Abd. Wahab Bukan Eksekutif

4 Fong Kok Yong Pengarah Eksekutif

5 Fong Kiah Yeow Pengarah Eksekutif

Jawatankuasa bertanggungjawab untukmembangunkan polisi imbuhan dan menentukanpakej imbuhan bagi Pengarah-pengarah EksekutifSinmah. Jawatankuasa membuat pengesyorankepada Lembaga bagi kesemua elemen imbuhan,terma-terma pekerjaan, struktur ganjaran danfaedah sampingan kepada Pengarah Eksekutif.

Penentuan imbuhan para Pengarah BukanEksekutif merupakan urusan Lembaga secarakeseluruhannya.

2.3 Jawatankuasa Penamaan

Bagi tempoh kewangan bertakhir 31 Disember2004, Jawatankuasa adalah terdiri daripadaseperti berikut:

No. Pengarah Jawatan

1 Y. Bhg. Datuk Haji Pengerusi, Abdul Razak Pengarah Bebas Bin Alias Bukan Eksekutif

2 Tuan Haji Baharom Pengarah Bebas Bin Abd. Wahab Bukan Eksekutif

3 Mohd Khasan Pengarah Bebas Bin Ahmad Bukan Eksekutif

Jawatankuasa bertanggungjawab untuk mengenalpasti dan mengesyorkan nomini baru kepadaLembaga serta Jawatankuasa Lembaga. Selaindaripada itu, Jawatankuasa juga diberikepercayaan dengan tugas menilai Pengarah-pengarah sedia ada atas dasar berterusan.Jawatankuasa Penamaan juga menimbangkanimbangan keahlian lembaga dan menentukankeupayaan dan kemahiran teras yang diperlukandaripada Lembaga.

2.4 Jawatankuasa Skim Opsyen SahamKakitangan (“ESOS”)

Terdapat Jawatankuasa ESOS ditubuhkan untukmentadbir Skim Opsyen Saham KakitanganSyarikat (“SKIM”). Jawatankuasa ESOS terdiridaripada kakitangan pengurusan kanan. Tidakada para Pengarah Syarikat yang mendudukiJawatankuasa ESOS.

Jawatankuasa ESOS mempunyai kuasa untukmentadbir Skim dan untuk menerbitkan sahamberhubung dengan ESOS pada bila-bila masatertakluk kepada terma-terma dan syarat-syarattertentu selaras dengan Peruntukan Undang-undang Kecil sebagaimana diluluskan oleh pihakberkuasa relevan dan untuk tujuan tertentusebagaimana Jawatankuasa ESOS mungkinanggap wajar dengan syarat bahawa agregatbilangan saham yang akan diterbitkan tidakmelebihi 10% modal saham Syarikat yang akanditerbitkan pada masa tawaran.

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3. LATIHAN PENGARAH

Sebagai elemen penting proses pelantikan Pengarahbaru, Lembaga memastikan agar terdapat programorientasi dan pendidikan untuk ahli-ahli Lembaga yangbaru. Ini disokong dengan lawatan ke lokasi-lokasipenting dan bermesyuarat dengan eksekutif-eksekutifkanan penting yang lain. Pengarah juga mendapatlatihan selanjutnya dari masa ke masa, khususnya

mengenai undang-undang dan peraturan baru yangberkaitan serta risiko-risiko komersil yang sentiasaberubah.

Semua Pengarah telah menghadiri dan dengan jayanyamenamatkan Program Pentauliahan Mandatori (“MAP”)yang dijalankan oleh Institusi Penyelidikan Juru AnalisisPelaburan Malaysia (“RIIAM”).

4. IMBUHAN PENGARAH

Butir-butir jumlah imbuhan para Pengarah dalam tempoh kewangan adalah seperti berikut:

Pengarah Pengarah BukanEksekutif Eksekutif JumlahRM’000 RM’000 RM’000

Jumlah imbuhan

Yuran – 84 84

Gaji & lain-lain emolumen 2,061 – 2,061

Bonus – – –

Kos pencen-pelan caruwan dinyatakan 247 – 247

2,308 84 2,392

Bilangan Pengarah-pengarah yang imbuhannya termasuk dalam kumpulan berikut:

Pengarah Pengarah BukanEksekutif Eksekutif Jumlah

Bawah RM50,000 – 3 3RM200,001 hingga RM250,000 2 – 2RM450,001 hingga RM500,000 4 – 4


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5. KOMUNIKASI PEMEGANG SAHAM DANHUBUNGAN PELABUR

Lembaga mengiktiraf keperluan bagi pemegang-pemegang saham untuk dimaklumkan mengenaikesemua perkara perniagaan yang secara materialnyamelibatkan Syarikat. Dengan yang demikian, Syarikatberkomunikasi dengan pemegang-pemegangsahamnya, pelabur-pelabur institusi dan berpotensimelalui pelbagai pengumuman yang dibuat dalamtahun semasa. Selain daripada itu, Lembaga jugamemastikan penyiaran keputusan-keputusan kewangantepat pada masa atas dasar suku tahunan untukmenyediakan pemegang-pemegang sahamnya dengangambaran keseluruhan prestasi kewangan dan operasiKumpulan Sinmah.

Mesyuarat Agung Tahunan (“AGM”) Syarikat jugaadalah satu cara komunikasi dengan pemegang-pemegang sahamnya. Pemegang-pemegang sahamyang tidak dapat hadir dibenarkan untuk melantikproksi bagi menghadiri dan mengundi bagi pihakmereka. Ahli-ahli Lembaga, serta juga juruaudit luardan penasihat undang-undang Syarikat hadir untukmenjawab soalan yang ditimbulkan pada mesyuarat.Lembaga juga menggalakkan penyertaan daripadapemegang-pemegang saham melalui sesi soal danjawab dalam AGM, di mana para Pengarah bersediauntuk menjawab soalan mengenai prestasi kewangan,operasi perniagaan dan prospek Kumpulan.

6. KEBERTANGGUNGJAWAPAN DAN AUDIT

6.1 Pelaporan Kewangan

Bagi pelaporan kewangan melalui laporan sukutahunan kepada Bursa Sekuriti dan laporantahunan kepada pemegang-pemegang saham,para Pengarah mempunyai tanggungjawab untukmembentangkan penilaian yang adil mengenaikedudukan kewangan Kumpulan. JawatankuasaAudit membantu Lembaga dalam menelitimaklumat bagi pendedahan untuk memastikanketepatan dan kesempurnaan maklumat.

6.2 Kawalan Dalaman

Lembaga bertanggungjawab dalam memastikanbahawa sistem kawalan dalaman Kumpulandilaksanakan dan keberkesanannya dikaji secarakerap bagi memastikan kecukupan sistem ini.

Sebagai sebahagian daripada kawalan dalamandan dalam pengurusan risiko harian, sistem-sistemberikut mengenai pelaporan dan proses sertaprosedur standard wujud dalam Kumpulan:-

a) Pelaporan sebenar bulanan – menyediakanprestasi kewangan yang relevan, bolehdipercayai dan terkini berbandingbelanjawan, bulan sebelumnya dan tahunterdahulu termasuk penerangan terperincimengenai apa-apa perbezaan yang besar.

b) Pembahagian jelas autoriti yang wujud diantara Pengurusan anak-anak syarikat danLembaga Pengarah Kumpulan. Sejauh manayang mungkin, anak-anak syarikat diberiautonomi manakala beroperasi dalampersekitaran kawalan dalaman yang mantap.

Kajian mengenai sistem kawalan dalamandinyatakan di bawah Penyata Kawalan Dalamanpada muka surat 42 hingga 43 Laporan Tahunan.

6.3 Hubungan dengan Juruaudit

Peranan Jawatankuasa Audit berhubung denganjuruaudit luar diterangkan dalam LaporanJawatankuasa Audit di muka surat-muka surat 46hingga 48 Laporan Tahunan. Syarikat akansentiasa mengekalkan perhubungan yang rapatdan telus dengan juruaudit-juruaudit luarnyadalam mendapatkan nasihat profesional danmemastikan pematuhan piawaian-piawaianperakaunan di Malaysia.

6.4 Perhubungan dengan Pengurusan

Lembaga mengekalkan perhubungan yang rapatdan telus dengan semua kakitangan pengurusan.Lembaga mempunyai semua maklumatberhubung dengan pengurusan operasi daripadapelbagai laporan yang disediakan oleh kakitanganpengurusan. Ini akan membolehkan mereka untukmemahami operasi dengan lebih baik danmembuat keputusan dalam memandu Syarikat kearah perniagaan yang menguntungkan. Selain itu,para Pengarah Eksekutif juga sering mengadakanmesyuarat pengurusan bulanan dengankakitangan pengurusan untuk membincangkandan merancang untuk operasi Syarikat.

7. PENYATAAN PEMATUHAN DENGAN AMALANTERBAIK KOD

Syarikat komited untuk mencapai standard tinggi urustadbir korporat di semua peringkat Kumpulan dantahap ketulusan dan standard etika tertinggi dalamkesemua urusniaga perniagaannya. Lembagamenganggap bahawa ia telah mematuhi padasepanjang tempoh kewangan dengan Prinsip danAmalan Terbaik sebagaimana dikemukakan dalam Kod.

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8. PENYATA TANGGUNGJAWAB PARAPENGARAH

Lembaga Pengarah dikehendaki di bawah Perenggan15.27(a) Syarat-syarat Penyenaraian untukmengeluarkan pernyataan yang menjelaskantanggungjawab mereka dalam penyediaan penyatakewangan tahunan. Para Pengarah dikehendaki olehAkta Syarikat 1965 untuk menyediakan penyatakewangan bagi setiap tahun kewangan yang memberigambaran sebenar dan saksama akan hal ehwalSyarikat dan Kumpulan pada akhir tahun kewangandan untung rugi Syarikat dan Kumpulan bagi tahunkewangan. Dalam menyediakan penyata-penyatakewangan ini, para Pengarah telah:

• Menggunakan polisi perakaunan yang sesuai danmenggunakannya secara konsisten;

• Membuat keputusan dan anggaran yangmunasabah dan berhemah; dan

• Menyatakan sama ada piawai perakaunanterpakai telah diikuti tertakluk kepada apa-apapemesongan material yang dinyatakan dandijelaskan dalam penyata kewangan

Para Pengarah bertanggungjawab bagi menyimpanrekod perakaunan, yang dinyatakan dengan ketepatanmunasabah pada bila-bila masa akan kedudukankewangan Syarikat dan Kumpulan dan yangmembolehkan mereka untuk memastikan bahawapenyata kewangan mematuhi Akta Syarikat 1965 danpiawai perakaunan terpakai di Malaysia.

Para Pengarah juga bertanggungjawab untukmengambil langkah tertentu munasabah yang terbukakepada mereka untuk melindungi aset-aset Kumpulandan untuk mencegah dan mengesan fraud dan lain-lainyang di luar aturan.

9. LAIN-LAIN MAKLUMAT

9.1 Penggunaan perolehan

Tidak ada perolehan telah dikumpul oleh Syarikatdaripada mana-mana langkah korporat dalamtempoh kewangan.

9.2 Belian Balik Saham

Dalam tempoh kewangan, tidak ada belian baliksaham oleh Syarikat.

9.3 Opsyen, Waran atau Sekuriti Boleh Tukar

Tidak ada opsyen, waran atau sekuriti boleh tukarbaru diterbitkan dalam tempoh kewangan.

9.4 Program American Depository Receipt(“ADR”) atau Global Depository Receipt(“GDR”)

Syarikat tidak menaja apa-apa program ADR atauGDR dalam tempoh kewangan.

9.5 Pengenaan Sanksi dan/atau Penalti

Tidak ada sanksi dan/atau penalti yang dikenakanke atas Syarikat atau anak-anak syarikatnya, parapengarah atau pengurusan oleh mana-mana pihakberkuasa berkaitan bagi tempoh kewanganberakhir 31 Disember 2004, kecuali bagikesalahan trafik.

9.6 Yuran Bukan Audit

Terdapat jumlah yuran bukan audit sebanyakRM138,000 untuk fungsi audit dalaman yang telahdibayar atau perlu dibayar kepada juruaudit luardan syarikat-syarikat gabungan mereka melaluiKumpulan bagi tempoh kewangan berakhir 31Disember 2004.

9.7 Variasi dalam Keputusan

Tidak ada pelencongan sebanyak 10% atau lebihdi antara kerugian selepas cukai dan kepentinganminoriti dinyatakan dalam pengumuman pada 28Februari 2005 mengenai keputusan tidak diauditbagi tempoh kewangan berakhir 31 Disember2004.

9.8 Jaminan Keuntungan

Syarikat tidak memberi apa-apa jaminankeuntungan dalam tempoh kewangan.

9.9 Kontrak Material

Tidak ada kontrak material yang ditandatanganioleh Syarikat dan anak-anak syarikatnya yangmelibatkan para Pengarah dan pemegang-pemegang saham utama yang masih wujud padaakhir tempoh kewangan atau jika tidak wujud padaketika itu, ditandatangani sejak akhir tempohkewangan sebelumnya.

9.10 Dasar Penilaian Semula ke atas Hartanah

Syarikat tidak menerima pakai apa-apa dasarpenilaian semula ke atas hartanah dalam tempohkewangan.


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corporate governance statement

The Board of Directors is committed to ensure the higheststandard of corporate governance is practiced throughoutSinmah Resources Berhad ("Sinmah") and its Group ofsubsidiaries as a fundamental part of discharging itsresponsibilities to protect and enhance shareholders valueand the financial performance of the Group.

The Board of Directors is pleased to report to theshareholders on the manner of which the Group has appliedwith the principles, and the extent of compliance with thebest practices and good governance as set out in Part 1and Part 2 respectively of the Malaysian Code on CorporateGovernance ("the Code").

1. BOARD OF DIRECTORS

1.1 The Board

Sinmah is led and managed by an experiencedBoard comprising of members with a range ofexperience in relevant fields such as poultryfarming, business administration, planning,development and marketing. The Boardcomprises of nine (9) members.

Three (3) out of nine (9) members of the Board areindependent non-executive Directors. As such,one third (1/3) of the Board comprises ofindependent non-executive Directors. Thepresence of independent non-executive Directorsfulfils a pivotal role in corporate accountability.Although all the Directors have an equalresponsibility to the Group, the role of theseindependent non-executive Directors isparticularly important as they provide unbiased

and independent views, advice and judgement totake account of the interests not only of the Group,but also of the shareholders, employees,customers and many communities in which theGroup conducts its business. The Companyrecognises the contribution of non-executiveDirectors as equal Board members to thedevelopment of the Company’s strategy, theimportance of representing the interests of publicshareholders and providing a balanced andindependent view to the Board. All non-executiveDirectors are independent of management andfree from any relationship which could interferewith their independent judgement.

The Non-Executive Directors contributesignificantly in areas such as policy and strategy,performance monitoring, allocation of resourcesas well as improving governance and controls.Encik Mohd Khasan bin Ahmad acts as the SeniorIndependent Non-Executive Director of the Boardto whom any concerns may be conveyed.

1.2 Board Meetings

The Board meets at least four (4) times a year andadditional meetings are held as and whenrequired. It meets two (2) months after the end ofevery quarter of the financial year, whereat, theSinmah Group’s financial statements aredeliberated and considered.

During the financial period ended 31 December2004, the Board met a total of five (5) times.Details of the attendance are as follows:

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1.3 Supply of Information

All Directors are provided with an agenda and aset of Board papers for seven (7) days prior toBoard meetings to enable the Directors to obtainfurther information or explanations, wherenecessary, in order to be properly briefed beforethe meeting. The Minutes of the previous Boardmeetings are also circulated to the Directors andconfirmed at each meeting. Minutes of the Boardmeetings are maintained by the CompanySecretary.

There is a schedule of matters reservedspecifically for the Board’s decision, includingSinmah Group’s financial results, the businessplan, the direction of the Group, new investmentand business proposals, the management orperformance of the business of subsidiaries,corporate plans and annual budgets, acquisitionsand disposals of undertakings and properties of asubstantial value, major investments and financialdecision, changes to the management and controlstructure within the Group, including key policiesand procedures and discretionary authority limits.

Directors may obtain independent professionaladvice in the furtherance of their duties, at theCompany’s expenses and all Directors haveaccess to the advice and services of theCompany Secretary in carrying out their duties.

1.4 Re-election of the Directors

In accordance with the Company’s Articles ofAssociation, one-third (1/3) or nearest to one-third(1/3) of the Directors for the time being shall retirefrom their office and be eligible for re-electionprovided always that all the Directors shall retirefrom their office once at least in each three (3)years but shall be eligible for re-election. Anyperson appointed by the Board either to fill acasual vacancy or as an addition to the existingDirectors, shall hold office only until the nextannual general meeting and shall then be eligiblefor re-election.

No of board meetingsNo Directors Description attended

1 Y. Bhg. Datuk Haji Abdul Razak Bin Alias Chairman, Independent 4 out of 5Non Executive Director

2 Fong Kok Yong Managing Director 5 out of 53 Fong Kiah Yeow Executive Director 5 out of 54 Fong Ngan Teng Executive Director 5 out of 55 Fong Choon Kai Executive Director 5 out of 56 Ng Cheu Kuan Executive Director 5 out of 57 Y. Bhg. Datuk Ng Peng Hay @ Ng Peng Hong Executive Director 4 out of 58 Tuan Haji Baharom Bin Abd. Wahab Independent Non-

Executive Director 5 out of 59 Mohd Khasan Bin Ahmad Independent Non-

Executive Director 5 out of 5


38

2. BOARD COMMITTEES

The following Board Committees have beenestablished to assist the Board in the execution of itsresponsibilities. All the Committees listed below do nothave executive powers but report to the Board on allmatters considered and submit recommendations forthe Board’s approval (except the power of the AuditCommittee to report to the Bursa Malaysia SecuritiesBerhad ("Bursa Securities") in circumstances describedin the Audit Committee Report):

2.1 Audit Committee

The Audit Committee reviews issues of accountingpolicy and presentation for external financialreporting, monitors the work of the internal auditfunction and ensures an objective andprofessional relationship is maintained with theexternal auditor. The Committee has full access tothe auditors, who in turn, have access at all timesto the Chairman of the Committee.

The Audit Committee terms of reference togetherwith the Audit Committee Report are disclosed onpages 49 to 51 of the Annual Report. Theactivities of the Audit Committee during the periodended 31 December 2004 are also set out underthe Audit Committee Report.

2.2 Remuneration Committee

The Remuneration Committee for the financialperiod ended 31 December 2004 comprises thefollowing:

No Directors Description

1 Mohd Khasan Chairman, Independent Bin Ahmad Non-Executive Director

2 Y. Bhg. Datuk Haji Independent Non-Abdul Razak Executive DirectorBin Alias

3 Tuan Haji Baharom Independent Non- Bin Abd. Wahab Executive Director

4 Fong Kok Yong Executive Director

5 Fong Kiah Yeow Executive Director

The Committee is responsible for developing aremuneration policy and determining remunerationpackages for Executive Directors of Sinmah. TheCommittee makes recommendations to the Boardfor all elements of remuneration, terms ofemployment, reward structures and fringe benefitsfor Executive Directors.

The determination of the remuneration of the Non-Executive Directors is a matter for the Board as awhole.

2.3 Nomination Committee

For the financial period ended 31 December 2004the Committee comprises the following:

No Directors Description

1 Y. Bhg. Datuk Haji Chairman, Abdul Razak Independent Non-Bin Alias Executive Director

2 Tuan Haji Baharom Independent Non-Bin Abd. Wahab Executive Director

3 Mohd Khasan Independent Non-Bin Ahmad Executive Director

The Committee is responsible for identifying andrecommending new nominees to the Board as wellas Committees of the Board. In addition, theCommittee is also entrusted with the task ofassessing existing Directors on an ongoing basis.The Nomination Committee also considers thebalance of the board membership and determinesthe core competencies and skills required of theBoard.

2.4 Employees’ Share Option Scheme("ESOS") Committee

There was an ESOS Committee set up toadminister the Company’s Employees’ ShareOption Scheme ("the Scheme"). The ESOSCommittee comprises of the senior managementstaff. None of the Directors of the Company sits inthe ESOS Committee.

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The ESOS Committee has the power to administerthe Scheme and to issue shares in respect of theESOS at any time upon such terms and conditionsin accordance with the provisions of the By-Lawsas approved by the relevant authorities and forsuch purposes as the ESOS Committee maydeem fit provided that the aggregate number ofshares to be issued does not exceed 10% of theissued share capital of the Company at the time ofoffer.

3. DIRECTORS’ TRAINING

As an integral element of the process of appointingnew Directors, the Board ensures that there is anorientation and education programme for new Boardmembers. This is supplemented by visits to keylocations and meetings with other key seniorexecutives. Directors also receive further training fromtime to time, particularly on relevant new laws andregulations and changing commercial risks.

All the Directors have attended and successfullycompleted the Mandatory Accreditation Programme(MAP) conducted by the Research Institute ofInvestment Analyst Malaysia (RIIAM).

4. DIRECTORS’ REMUNERATION

The details of the total remuneration of the Directors during the financial period are as follows:

Executive Directors Non-Executive Directors TotalRM’000 RM’000 RM’000

Total remuneration

Fees – 84 84

Salaries & other 2,061 – 2,061emoluments

Bonus – – –

Pension costs 247 – 247defined contribution plan

2,308 84 2,392

Number of Directors whose remuneration falls within the following bands:-

Executive Directors Non-Executive Directors Total

Below RM50,000 – 3 3RM200,001 to RM250,000 2 – 2RM450,001 to RM500,000 4 – 4


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5. SHAREHOLDERS’ COMMUNICATIONS ANDINVESTORS RELATIONS

The Board acknowledges the need for theshareholders to be informed of all material businessmatters affecting the Company. As such, the Companycommunicates with its shareholders, institutional andpotential investors through the various announcementsmade during the year. In addition, the Board alsoensures timely release of the financial results on aquarterly basis in order to provide its shareholders withan overview of Sinmah Group’s financial andoperational performance.

The Annual General Meeting (AGM) of the Company isalso a means of communication with its shareholders.Shareholders who are unable to attend are allowed toappoint proxies to attend and vote on their behalf.Members of the Board, as well as the external auditorsand legal advisers of the Company are present toanswer questions raised at the meeting. The Boardhas also been encouraging the participation fromshareholders through questions and answers sessionduring the AGM, where the Directors are available toanswer questions on the financial performances andthe business operations of the Group.

6. ACCOUNTABILITY AND AUDIT

6.1 Financial Reporting

For financial reporting through quarterly reports toBursa Securities and the annual report to theshareholders, the Directors have a responsibility topresent a fair assessment of the Group’s financialposition. The Audit Committee assists the Boardin scrutinizing information for disclosure to ensureaccuracy and completeness of information.

6.2 Internal Controls

The Board is responsible in ensuring that theGroup’s systems of internal control are in placeand that its effectiveness be constantly reviewedto ensure the adequacy of these systems.

As part of internal control and in the dailymanagement of risks, the following systems ofreporting and standard processes and proceduresexist within the Group:-

a) Monthly actual reporting – providing relevant,reliable and up to-date financial performanceagainst budget, previous month and prioryear including detailed explanation of anymajor variances.

b) Clear lines of authority exist betweenManagement of the subsidiaries and theGroup’s Board of Directors. As far aspossible, the subsidiaries are givenautonomy whilst operating within theestablished internal control environment.

The review on the systems of internal control is setout under the Statement on Internal Control onpage 44 to 45 of the Annual Report.

6.3 Relationship with the Auditors

The role of the Audit Committee in relation to theexternal auditors is described in the AuditCommittee Report on pages 49 to 51 of theAnnual Report. The Company has alwaysmaintained a close and transparent relationshipwith its external auditors in seeking professionaladvice and ensuring compliance with theaccounting standards in Malaysia.

6.4 Relationship with the Management

The Board maintains a close and transparentrelationship with all the management staff. TheBoard has all its information related to running ofthe operations from various reports prepared bythe management staff. This will allow them tounderstand the operations better and makedecisions in steering the Company towards aprofitable business. In addition, the ExecutiveDirectors also hold frequent monthly managementmeetings with the management staff in order todiscuss and plan for the Company’s operations.

7. STATEMENT OF COMPLIANCE WITH THEBEST PRACTICES OF THE CODE

The Company is committed to achieving highstandards of corporate governance throughout theGroup and to the highest level of integrity and ethicalstandards in all its business dealings. The Boardconsiders that it has complied throughout the financialperiod with the Best Principles as set out in the Code.

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8. DIRECTORS’ RESPONSIBILITY STATEMENT

The Board of Directors is required under Paragraph15.27(a) of the Listing Requirements to issue astatement explaining their responsibility in thepreparation of the annual financial statements. TheDirectors are required by the Companies Act, 1965 toprepare financial statements for each financial yearwhich give a true and fair view of the state of affairs ofthe Company and of the Group as at the end of thefinancial year and of the profit and loss of the Companyand of the Group for the financial year. In preparingthese financial statements, the Directors have:-

• Used appropriate accounting policies andconsistently applied them;

• Made judgements and estimates that arereasonable and prudent; and

• Stated whether applicable accounting standardshave been followed, subject to any materialdepartures disclosed and explained in thefinancial statements.

The Directors are responsible for keeping properaccounting records, which are disclosed withreasonable accuracy at any time the financial positionof the Company and of the Group and to enable themto ensure that the financial statements comply with theCompanies Act 1965 and applicable accountingstandards in Malaysia.

The Directors are also responsible for taking suchsteps that are reasonably open to them to safeguardthe assets of the Group and to prevent and detectfraud and other irregularities.

9. OTHER INFORMATION

9.1 Utilisation of proceeds

No proceeds were raised by the Company fromany corporate exercise during the financial period.

9.2 Share Buy-backs

During the financial period, there were no sharebuy-backs by the Company.

9.3 Options, Warrants or ConvertibleSecurities

There were no new options, warrants orconvertible securities issued during the financialperiod.

9.4 American Depository Receipt ("ADR") orGlobal Depository Receipt ("GDR")Programme

The Company did not sponsor any ADR or GDRprogramme during the financial period.

9.5 Imposition of Sanctions and/or Penalties

There were no sanctions and/or penalties imposedon the Company or its subsidiaries, directors ormanagement by any relevant authority for thefinancial period ended 31 December 2004, exceptfor traffic offences.

9.6 Non-Audit Fee

There was a total amount of non-audit fees ofRM138,000 for internal audit function which waspaid or payable to the external auditors and theiraffiliated companies by the Group for the financialperiod ended 31 December 2004.

9.7 Variation in Results

There was no deviation of 10% or more betweenthe loss after taxation and minority interest statedin the 28 February 2005 announcement ofunaudited results for the financial period ended 31December 2004 and the audited financialstatements of the Group for the financial periodended 31 December 2004.

9.8 Profit Guarantee

The Company did not give any profit guaranteeduring the financial period.

9.9 Material Contracts

There were no material contracts entered into bythe Company and its subsidiaries involvingDirectors’ and major shareholders’ interest whichwere still subsisting at the end of the financialperiod or if not then subsisting, entered into sincethe end of the previous financial year.

9.10 Revaluation Policy on Landed Properties

The Company did not adopt any revaluation policyon landed properties during the financial period.


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penyata kawalan dalaman

1. PENGENALAN

Penyata mengenai Kawalan Dalaman ini dibuat selarasdengan Kod Malaysia mengenai Urus Tadbir Korporatdan perenggan 15.27(b) Syarat-syarat PenyenaraianBursa Malaysia Securities Berhad, yang memerlukansyarikat-syarikat awam berhad untuk membuat penyataberkenaan tahap kawalan dalaman mereka, sebagaikumpulan, dalam laporan tahunan mereka.

2. TANGGUNGJAWAB

Lembaga mengakui tanggungjawabnya bagi sistemkawalan dalaman Kumpulan, yang termasukpenubuhan persekitaran kawalan dan rangka kerjayang sesuai serta mengkaji kelayakan dan integriti.Sistem kawalan dalaman ini dimaksudkan untukmengawal pelaburan pemegang-pemegang sahamdan aset-aset Kumpulan dan ia merangkumi kawalan-kawalan kewangan, operasi, pematuhan danberperaturan.

Walau bagaimanapun, disebabkan batasan yang sediaada dalam mana-mana sistem kawalan dalaman,sistem ini direka untuk mengurus, dan bukannyamelupuskan, risiko kegagalan untuk mencapai objektifkorporat. Selaras dengan itu, ia hanya bolehmenyediakan jaminan munasabah tetapi bukanjaminan sepenuhnya terhadap salah nyataan ataukerugian material.

3. SISTEM KAWALAN DALAMAN KUMPULAN

Lembaga berpendapat bahawa Kumpulan mempunyaipersekitaran kawalan yang mencukupi dan kondusifbaginya untuk melaksanakan objektif perniagaannya.Sistem kawalan dalaman Kumpulan merangkumiLemabga dan beberapa Jawatankuasa Lembaganyadengan bidang-bidang tugas khusus, pengurusaneksekutif yang bertanggungajwab bagi semuatindakannya dan juga beberapa prosedur pengawasandan kajian yang terdapat dalam proses-prosesKumpulan. Lembaga juga percaya bahawa proses-proses kawalan ini hendaklah disemak secara kerapuntuk memastikan agar sistem kawalan dalaman yangberkesan dikekalkan dalam Kumpulan.

Beberapa elemen penting daripada sistem kawalandalaman Kumpulan digambarkan di bawah:

• Terdapat struktur organisasi rasmi dengan saluranyang dijelaskan tentang kuasa, tanggungjawabdan kebertanggungjawaban dalam Kumpulan.

• Had kuasa telah diwujudkan dalam Kumpulanuntuk menyediakan fungsi rangka kerja kuasadalam meluluskan perbelanjaan hasil dan modal.

• Pelaburan besar, pengambilalihan dan pelupusantelah ditaksir sebelum diluluskan oleh Lembaga

• Butir-butir proses bajet di mana unit operasimenyediakan bajet untuk tahun akan datang yangtelah diluluskan pada kedua-dua peringkat unitoperasi dan oleh Pengarah Eksekutif. Kumpulanmengawal prestasinya dengan membandingkankeputusan bulanannya terhadap bajet danterhadap keputusan bulan sebelumnya, yangmemerlukan semua varians material untuk dikenalpasti dan dikaji oleh pengurusan atas dasar tepatpada masa.

• Pengarah Eksekutif mengkaji akaun pengurusanbulanan semua syarikat seluruh Kumpulanmelainkan bagi syarikat-syarikat bersekututertentu.

• Pengarah Eksekutif mengendalikan mesyuaratpengurusan bulanan dengan pengurusan semuaunit perniagaan penting dalam Kumpulanmelainkan bagi syarikat bersekutu tertentu dananak-anak syarikat asing. Daripada mesyuaratpengurusan bulanan ini, Pengarah Eksekutif akanmengenal pasti bidang risiko-risiko penting dansekiranya perlu, meminta fungsi audit dalamanuntuk mengkaji risiko kewangan dan operasiperniagaan unit berkenaan.

• Pengarah Eksekutif dan ahli-ahli pasukanpengurusan membuat lawatan kerap ke unit-unitoperasi untuk memastikan bahawa unit-unitoperasi telah diuruskan dengan baik olehpersonel bertanggungjawab.

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• Kumpulan mendapat khidmat luar ke atas fungsiaudit dalaman kepada Tetuan Ernst & Young untukdua tempoh kewangan terakhir. Ruang lingkupkerja yang dijalankan oleh Tetuan Ernst & Youngtermasuk melaksanakan kajian proses perniagaanuntuk menilai keberkesanan kawalan dalaman,dan menonjolkan kepada Jawatankuasa Auditrisiko-rsiko penting yang memberi kesan ke atasunit-unit perniagaan berkenaan.

Dalam tempoh di bawah kajian, Tetuan Ernst & Youngmenjalankan audit ke atas bidang-bidang berikut:

• Laporan Kewangan Kumpulan

• Bajet dan Komitmen Modal

• Perbendaharaan dan Pengurusan Tunai

• Fungsi Pemprosesan Senarai Gaji, Perekrutan danPenaksiran Prestasi di Alor Gajah, Melaka

• Jualan, Kutipan Kredit dan Inventori danPenjadualan Logistik fungsi pengedarannya

• Operasi Depot Kumpulan tertentu

Laporan mengenai penemuan audit dalaman dansusulan oleh pengurusan mengenai pengesyoran keatasnya telah dikaji dan diambil perhatian olehJawatankuasa dalam Mesyuarat Jawatankuasa Auditdiadakan sepanjang tempoh di bawah kajian.Beberapa kelemahan kawalan dalaman kecil telahdikenal pasti oleh Tetuan Ernst & Young dalampengauditan operasi mereka. Semua kelemahankawalan dalaman kecil dikenal pasti dalam tempohtelah, atau sedang ditangani. Tidak ada kelemahantelah mengakibatkan sebarang kehilangan material,kontigensi atau tidak pasti yang akan memerlukanpendedahan dalam laporan tahunan Kumpulan.

Lembaga tidak secara kerap menkaji sistem kawalandalaman daripada syarikat bersekutunyamemandangkan Lembaga tidak mempunyai sebarangkawalan langsung ke atas operasi mereka. Namundemikian, kepentingan Kumpulan diawasi melaluipenerimaan dan kajian akaun pengurusan danpertanyaan mengenainya.

Berdasarkan yang di atas, Lembaga berpendapatbahawa terdapat dalam Kumpulan sistem kawalandalaman yang mencukupi yang akan membolehkanpengurusan risiko ke arah pencapaian objektifkorporatnya.

4. PENGURUSAN RISIKO

Kumpulan mewujudkan rangka kerja pengurusan risikorasmi dalam tahun kewangan sebelum ini yangmembolehkan pengurusan dan Lembaga untukberkongsi model yang sama dalam komunikasi danpenilaian berkesan semua risiko dan kawalan utama.Proses-proses melibatkan pengenalan pasti olehpengurusan eksekutif akan risiko-risiko, penaksiranrisiko dan kawalan dan perumusan rancangan tindakanyang sesuai sebelum perkara-perkara ini telah dibawake hadapan kepada Lembaga untuk kajian.

Proses Pengurusan Risiko telah dikaji di mesyuaratLembaga. Kajian termasuk perkara-perkara berkaitandengan risiko-risiko penting yang mungkinmenghalang objektif perniagaan.

5. KESIMPULAN

Lembaga dalam memenuhi tanggungjawabnya, telahmemberi jaminan bahawa Kumpulan mempunyairangka kerja pengurusan dan kawalan risiko yangteratur yang perlu untuk mencapai sistem kawalandalaman yang kukuh. Lembaga diberi jaminanbahawa sistem kawalan dalaman ini, yang dikaji atasdasar berterusan adalah mencukupi bagi Kumpulanuntuk mengurus risiko-risikonya dan untuk mencapaiobjektif perniagaannya.


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statement on internal control

1. INTRODUCTION

This Statement on Internal Control is made inaccordance with the Malaysia Code on CorporateGovernance and paragraph 15.27(b) of the BursaMalaysia Securities Berhad Listing Requirements,which requires public listed companies to make astatement about their state of internal control, as agroup, in their annual report.

2. RESPONSIBILITY

The Board acknowledges its responsibility for theGroup’s system of internal control, which includes theestablishment of an appropriate control environmentand framework as well as reviewing its adequacy andintegrity. This system of internal control is meant tosafeguard shareholders’ investments and the Group’sassets and it covers financial, operational, complianceand regulatory controls.

However, because of the limitations that are inherent inany system of internal control, this system is designedto manage, rather than eliminate, the risk of failure toachieve corporate objectives. Accordingly, it can onlyprovide reasonable assurance but not absoluteassurance against material misstatement or loss.

3. THE GROUP’S SYSTEM OF INTERNALCONTROL

The Board is of the opinion that the Group has anadequate and conducive control environment for it toaccomplish its business objectives. The Group’sinternal control system encompasses the Board and itsvarious Board Committees with its specific terms ofreference, executive management that is accountablefor all its actions and also various monitoring andreview procedures that is embedded in the Group’sprocesses. The Board also believes that these controlprocesses should be regularly reviewed to ensure thatan effective system of internal control is maintainedwithin the Group.

Some of the key elements of the Group’s internalcontrol systems are described below:

• There is a formal organizational structure withdelineated lines of authority, responsibility andaccountability within the Group.

• Authority limits are established within the Group toprovide a functional framework of authority inapproving revenue and capital expenditures.

• Major investments, acquisitions and disposals areappraised prior to approval by the Board.

• A detailed budgeting process where operatingunits prepare budgets for the coming year whichare approved both at operating unit level and bythe Executive Directors. The Group monitors itsperformance by comparing its monthly resultsagainst the budget and against the previousmonth’s results, which requires all materialvariances to be identified and reviewed bymanagement on a timely basis.

• The Executive Directors review monthlymanagement accounts of all companiesthroughout the Group except for certainassociated companies.

• The Executive Directors conduct monthlymanagement meetings with management of allsignificant business units within the Group exceptfor certain associated companies and foreignsubsidiaries. From these monthly managementmeetings, the Executive Directors would identifyareas of significant risks and if necessary, requestthe internal audit function to review the financialand operational risks of the business unitconcerned.

• The Executive Directors and members of themanagement team make regular visits tooperating units to ensure that the operating unitsare being well-managed by responsiblepersonnel.

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• The Group outsourced its internal audit function toMessrs. Ernst & Young for the last two financialperiods. The scope of work performed by MessrsErnst & Young includes performing reviews ofbusiness processes to assess the effectiveness ofinternal controls, and highlighting to the AuditCommittee significant risks impacting the businessunits concerned.

During the period under review, Messrs. Ernst & Youngcarried out audits on the following areas:

• Group’s Financial Reporting

• Budgeting and Capital Commitments

• Treasury and Cash Management

• Payroll Processing, Recruitment and PerformanceAppraisal functions in Alor Gajah, Melaka

• Sales, Credit Collection and Inventory and LogisticScheduling of its distribution function

• Certain of the Group’s Depot Operations.

The report on internal audit findings and follow up bymanagement on the recommendations thereon wasreviewed and noted by the Committee during the AuditCommittee Meetings held throughout the period underreview. A number of minor internal control weaknesseswere identified by Messrs. Ernst & Young during theiroperations audit. All the minor internal controlweaknesses identified during the period have been, orare being addressed. None of the weaknesses haveresulted in any material losses, contingencies oruncertainties that would require disclosure in theGroup’s annual report.

The Board does not regularly review the internal controlsystem of its associated companies as the Board doesnot have any direct control over their operations.Notwithstanding, the Group’s interests are servedthrough receipt and review of management accountsand enquiries thereon.

Based on the above, the Board is of the opinion thatthere exists within the Group an adequate system ofinternal controls that would enable the management ofrisks towards the achievement of its corporateobjectives.

4. RISK MANAGEMENT

The Group established a formal risk managementframework during the previous financial year whichenabled management and the Board to share acommon model in the effective communication andevaluation of all principal risks and controls. Theprocess involved executive management’sidentification of risks, assessment of risks and controlsand formulation of appropriate action plans beforethese are escalated to the Board for review.

Risk Management processes were reviewed at theBoard meetings. The review includes matters relatingto significant risks which may impede businessobjectives.

5. CONCLUSION

The Board in fulfilling its responsibilities, has ensuredthat the Group has a proper risk management andcontrol framework that is necessary to achieve a soundsystem of internal control. The Board is assured thatthis system of internal control, which is reviewed on anongoing basis, is adequate for the Group to manage itsrisks and to achieve its business objectives.


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laporan jawatankuasa audit

Lembaga Pengarah dengan sukacitanya menyampaikanLaporan Jawatankuasa Audit berikut dan kegiatannya bagitempoh kewangan berakhir 31 Disember 2004.

1. AHLI JAWATANKUASA

Ahli-ahli Jawatankuasa Audit terdiri daripada ahli-ahliberikut:-

Y. Bhg. Datuk Haji Abdul Razak Bin Alias Pengerusi Jawatankuasa dan Pengarah BukanEksekutif Bebas

Y. Bhg. Datuk Ng Peng Hay @ Ng Peng HongPengarah Eksekutif

Tuan Haji Baharom Bin Abd WahabPengarah Bukan Eksekutif Bebas

Encik Mohd Khasan Bin AhmadPengarah Bukan Eksekutif Bebas

2. BIDANG TUGAS

2.1 Komposisi

Syarikat akan melantik Jawatankuasa Auditdaripada kalangan para pengarahnya dan akanterdiri tidak kurang daripada tiga (3) ahli yangmana majoriti merupakan pengarah bebas. Tidakada pengarah silih ganti boleh dilantik sebagaiahli Jawatankuasa dan sekurang-kurangnyaseorang (1) ahli Jawatankuasa:-

(a) hendaklah merupakan ahli Institut AkauntanMalaysia; atau

(b) sekiranya beliau bukan merupakan ahliInstitut Akauntan Malaysia, beliau hendaklahmempunyai sekurang-kurangnya tiga (3)tahun pengalaman kerja dan:-

(i) beliau hendaklah lulus peperiksaanyang ditetapkan dalam Bahagian 1Jadual Pertama Akta Akauntan 1967;atau

(ii) beliau hendaklah ahli salah sebuahpersatuan akauntan yang dinyatakandalam Bahagian II Jadual I AktaAkauntan 1967, atau

(iii) memenuhi syarat-syarat lain tertentusebagaimana ditetapkan oleh bursa.

Ahli Jawatankuasa Audit hendaklah memilihseorang Pengerusi daripada bilangan kalangan mereka yang hendaklah merupakan pengarah bebas. Sekiranya mana-manakekosongan dalam Jawatankuasa mengakibatkanketidakpatuhan syarat-syarat yang dinyatakan diatas, Syarikat hendaklah mengisi kekosongandalam masa tiga (3) bulan. Lembaga PengarahSyarikat hendaklah mengkaji bidang tugas danprestasi Jawatankuasa Audit dan setiap ahlinyasekurang-kurangnya sekali dalam setiap tiga (3)tahun untuk menentukan sama ada jawatankuasaaudit dan ahli tersebut telah melaksanakan tugasmereka selaras dengan bidang-bidang tugasmereka.

2.2 Hak

Jawatankuasa Audit hendaklah, selaras denganprosedur yang akan ditentukan oleh LembagaPengarah dan atas kos Syarikat:-

(a) mempunyai kuasa untuk menyiasat apa-apaperkara dalam bidang-bidang tugasnya;

(b) mempunyai sumber yang diperlukan untukmelaksanakan tugas-tugasnya;

(c) mempunyai akses penuh dan tidak terbataskepada mana-mana maklumat yangberkaitan dengan Syarikat;

(d) mempunyai saluran komunikasi langsungdengan juruaudit luar dan individu (individu-individu) yang melaksanakan fungsi ataukegiatan audit dalaman (sekiranya ada);

(e) boleh mendapatkan nasihat profesionalbebas atau lain-lain nasihat; dan

(f) boleh mengadakan mesyuarat denganjuruaudit luar, tanpa kehadiran ahli-ahlijawatankuasa eksekutif, apabila dianggapperlu.

Di mana Jawatankuasa berpendapat bahawaperkara yang dilaporkan olehnya kepadaLembaga Pengarah Syarikat telah tidakdiselesaikan secara memuaskan mengakibatkanpemungkiran Syarat-syarat Penyenaraian BursaMalaysia Sekuriti Berhad (“Bursa Sekuriti”),Jawatankuasa Audit hendaklah dengan segeraakan melaporkan perkara sedemikian kepadaBursa Sekuriti.

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2.3 Mesyuarat

Jawatankuasa Audit hendaklah bermesyuaratsekurang-kurangnya setiap suku tahunan dalamtahun kewangan dan mengadakan mesyuarattambahan tertentu sebagaimana Pengerusi akanputuskan untuk melaksanakan tugas-tugasnya.Setiausaha Syarikat atau mana-mana orang yangdilantik oleh Jawatankuasa Audit hendaklahbertindak sebagai Setiausaha Jawatankuasa Auditdan akan bertanggungjawab, berunding denganPengerusi, untuk menyediakan agenda dan lain-lain dokumentasi penjelasan sokongan bagiedaran kepada Ahli-ahli Jawatankuasa sebelumsetiap mesyuarat. Setiausaha juga akanbertanggungjawab bagi memastikan minit-minitmesyuarat Jawatankuasa Audit, danmengedarkannya kepada lain-lain Ahlijawatankuasa Lembaga Pengarah. PengerusiJawatankuasa Audit hendaklah mengadakanmesyuarat Jawatankuasa Audit untukmenimbangkan apa-apa perkara yang juruauditluar fikirkan perlu untuk dibawa kepada perhatianPengarah-pengarah dan pemegang-pemegangsaham. Lain-lain Pengarah dan kakitanganhendaklah menghadiri mesyuarat JawatankuasaAudit tertentu hanya atas pelawaan JawatankuasaAudit, khusus untuk mesyuarat yang berkaitan.

Korum hendaklah terdiri daripada majoriti ahli-ahliyang hadir yang hendaklah merupakan pengarah-pengarah bebas.

2.4 Fungsi

Fungsi Jawatankuasa Audit adalah sepertiberikut:-

1. Mengkaji perkara yang berikut danmelaporkan yang sama kepada LembagaPengarah syarikat:-

(a) rancangan audit dengan juruaudit luar.

(b) penilaian sistem kawalan dalamandengan juruaudit luar.

(c) laporan audit dengan juruaudit luar.

(d) bantuan yang diberikan oleh kakitanganSyarikat kepada juruaudit luar.

(e) kecukupan skop, fungsi dan sumberbagi fungsi audit dalaman dan bahawaianya mempunyai autoriti yangsewajarnya untuk menjalankan kerjanya.

(f) program audit dalaman, proses-proses,keputusan program audit dalaman,proses atau penyiasatan yangdijalankan dan sama ada atau tidaktindakan sewajarnya telah diambil ataspengesyoran fungsi audit dalaman.

(g) keputusan suku tahunan dan penyatakewangan akhir tahun, sebelumkelulusan oleh Lembaga Pengarah,dengan menumpukan secara khususnyake atas:

(i) perubahan dalam ataupelaksanaan mana-manaperubahan penting polisiperakaunan;

(ii) peristiwa penting dan luar biasa;dan

(iii) pematuhan dengan piawaian-piawaian perakaunan dan lain-lainsyarat undang-undang.

(h) mana-mana urusniaga pihak berkaitandan keadaan percanggahankepentingan yang mungkin timbul dalamSyarikat atau Kumpulan termasuk apa-apa urusniaga, prosedur atau perjalanantindakan yang menimbulkan soalan-soalan ketulusan pengurusan.

(i) apa-apa surat perletakan jawatanjuruaudit luar Syarikat; dan

(j) sama ada terdapat sebab (disokongoleh alasan-alasan) untuk mempercayaibahawa juruaudit luar Syarikat tidaksesuai untuk pelantikan semula; dan

2. Untuk mengesyorkan penamaan seseorangatau beberapa orang sebagai juruaudit luar.


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3. MESYUARAT

Terdapat lima (5) mesyuarat Jawatankuasa Audit dalamtempoh kewangan berakhir 31 Disember 2004 yangmana kehadiran setiap Ahli Jawatankuasa adalahseperti berikut:

Jumlah Nama Ahli MesyuaratJawatankuasa yang dihadiri

1. Y. Bhg. Datuk Haji Abdul 4 daripada 5Razak Bin Alias

2. Tuan Haji Baharom 5 daripada 5Bin Abd. Wahab

3. Y. Bhg. Datuk Ng Peng Hay 4 daripada 5@ Ng Peng Hong

4. Encik Mohd Khasan 5 daripada 5Bin Ahmad

4. KEGIATAN JAWATANKUASA AUDIT

Dalam tempoh kewangan, kegiatan Jawatankuasatermasuk:

a. Mengkaji pengumuman keputusan kewangansuku tahunan Kumpulan bagi setiap suku tahunansebelum kelulusan Lembaga Pengarah.

b. Mengkaji laporan juruaudit luar berhubungdengan audit dan isu-isu perakaunan yang timbuldaripada audit, dan mengemas kiniperkembangan baru ke atas piawaian-piawaianperakaunan yang dikeluarkan oleh LembagaPiawaian Perakaunan Malaysia.

c. Mengkaji rancangan audit juruaudit luar.

d. Mengkaji urusniaga antara syarikat dan mana-mana urusniaga pihak berkaitan/berkepentinganyang mungkin timbul dalam Syarikat danKumpulan untuk memastikan pematuhan denganLembaga Piawaian Perakaunan Malaysia, Syarat-syarat Penyenaraian Bursa Malaysia dan lain-lainpihak berkuasa berkanun yang relevan dan untukmemastikan bahawa urusniaga sedemikian:-

• Dilaksanakan dalam perjalanan biasaperniagaan;

• Dijalankan atas terma-terma komersil biasadan berdasarkan terma-terma komersil yangseimbang dengan amalan dan polisiperniagaan biasa Kumpulan;

• Atas terma-terma yang tidak begitu memihakkepada pihak-pihak berkaitan yang secarakeseluruhannya tersedia kepada orangawam; dan

• Tidak mendatangkan kemudaratan kepadapemegang-pemegang saham minoritiSyarikat;

e. Mengkaji penyata kewangan tahunan Kumpulandan Syarikat dan membuat pengesyoransewajarnya yang berkaitan mengenainya.

f. Mengkaji laporan audit dalaman yang telahdisediakan oleh Tetuan Ernst & Young dan susulanke atas pelaksanaan pengurusan terhadaptindakan-tindakan yang disyorkan.

5. FUNGSI AUDIT DALAMAN

Jawatankuasa menyedari bahawa fungsi auditdalaman adalah penting untuk membantu dalammendapatkan jaminan yang ia perlukan berhubungdengan keberkesanan sistem kawalan dalaman.Dengan yang demikian, sebelum tempoh kewangan dibawah kajian, jawatankuasa melantik Tetuan Ernst &Young untuk menjalankan fungsi audit dalamannya.

Peranan utama fungsi audit dalaman adalah untukmengkaji keberkesanan sistem kawalan dalaman danini dilaksanakan dengan adil, cekap dan dengan sifatberjaga-jaga profesional sewajarnya.

Ringkasan kegiatan audit dalaman dilaksanakan olehTetuan Ernst & Young dalam tahun kewangan di bawahkajian dinyatakan dalam Penyata Kawalan Dalamanpada muka surat 42 Laporan Tahunan.

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report of the audit committee

The Board of Directors is pleased to present the followingAudit Committee Report and its activities for the financialperiod ended 31 December 2004.

1. MEMBERS OF THE COMMITTEE

The Audit Committee comprises the followingmembers:-

Y. Bhg. Datuk Haji Abdul Razak Bin AliasChairman of the Committee and Independent Non-Executive Director

Y. Bhg. Datuk Ng Peng Hay @ Ng Peng HongExecutive Director

Tuan Haji Baharom Bin Abd WahabIndependent Non-Executive Director

Encik Mohd Khasan Bin AhmadIndependent Non-Executive Director

2. TERMS OF REFERENCE

2.1 Composition

The Company shall appoint an Audit Committeefrom amongst its directors and shall consists ofnot less than three (3) in numbers of whom amajority shall be independent directors. Noalternate director is appointed as a member of theCommittee and at least one (1) member of theCommittee:-

(a) shall be a member of the Malaysian Instituteof Accountants; or

(b) if he is not a member of the MalaysianInstitute of Accountants, he must have atleast three (3) years’ working experience and:-

(i) he must have passed the examinationsspecified in Part I of the 1st Schedule ofthe Accountants Act 1967; or

(ii) he must be member of one of theassociation of accountants specified inPart II of the 1st Schedule of theAccountants Act 1967;

(iii) or fulfils such other requirements asprescribed by the Exchange.

The members of the Audit Committee shall elect aChairman from among their number who shall bean independent director. In the event of anyvacancy in Committee resulting in the non-compliance of the above stated conditions, theCompany shall fill the vacancy within three (3)months. The Board of Directors of the Companyshall review the term of office and performance ofthe Audit Committee and each of its members atleast once every three (3) years to determinewhether such audit committee and members havecarried out their duties in accordance with theirterms of reference.

2.2 Rights

The Audit Committee shall, in accordance with aprocedure to be determined by the Board ofDirectors and at the cost of the Company:-

(a) have authority to investigate any matter withinits terms of reference;

(b) have the resources which are required toperform its duties;

(c) have full and unrestricted access to anyinformation pertaining to the Company;

(d) have direct communication channels with theexternal auditors and person(s) carrying outthe internal audit function or activity (if any);

(e) be able to obtain independent professional orother advice; and

(f) be able to convene meeting with the externalauditors, excluding the attendance of theexecutive members of the committee,whenever deemed necessary.


50

Where the Committee is of the view that a matterreported by it to the Board of Directors of thecompany has not been satisfactorily resolvedresulting in a breach of the Listing Requirementsof Bursa Malaysia Securities Berhad ("BursaSecurities"), the Audit Committee shall promptlyreport such matter to the Bursa Securities.

2.3 Meeting

The Audit Committee shall meet at least eachquarter of a financial year and such additionalmeetings as the Chairman shall decide in order tofulfill its duties. The Company Secretary or anyperson appointed by the Audit Committee shallact as Secretary of the Audit Committee and shallbe responsible, in conjunction with the Chairman,for drawing up the agenda and other supportingexplanatory documentation for circulation to theCommittee Members prior to each meeting. TheSecretary will also be responsible for keeping theminutes of the meetings of the Audit Committee,and circulating them to Committee Members andto other members of the Board of Directors. TheChairman of the Audit Committee shall convene ameeting of the Audit Committee to consider anymatter the external auditor believes should bebrought to the attention of the Directors orshareholders. Other Directors and employeesmust attend any particular Audit Committeemeeting only at the Audit Committee’s invitation,specific to the relevant meeting.

A quorum shall consist of a majority of memberspresent who must be independent directors.

2.4 Functions

The functions of the Audit Committee are asfollows:-

1. Review the following and report the same tothe Board of Directors of the Company:-

(a) the audit plan with the external auditor.

(b) with the external auditor its evaluation ofthe system of internal controls.

(c) the audit report with the externalauditors.

(d) the assistance given by the employeesof the Company to the external auditor.

(e) the adequacy of the scope, functionsand resources of the internal auditfunctions and that it has the necessaryauthority to carry out its work.

(f) the internal audit programme,processes, the results of the internalaudit programme, processes orinvestigation undertaken and whether ornot appropriate action is taken on therecommendations of the internal auditfunction.

(g) the quarterly results and year endfinancial statements, prior to theapproval by the Board of Directors,focusing particularly on:

(i) changes in or implementation ofmajor accounting policy changes;

(ii) significant and unusual events; and(iii) compliance with accounting

standards and other legalrequirements.

(h) any related party transaction andconflict of interest situation that mayarise within the Company or Groupincluding any transaction, procedure orcourse of conduct that raises questionsof management integrity.

(i) any letter of resignation from the externalauditors of the Company; and

(j) whether there is reason (supported bygrounds) to believe that the Company’sexternal auditor is not suitable for re-appointment; and

2. To recommend the nomination of a person orpersons as external auditors.

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• Undertaken in the ordinary course ofbusiness;

• Carried out at arm’s length and based onnormal commercial terms consistent with theGroup’s usual business practices andpolicies;

• On terms not more favourable to the relatedparties than those generally available to thepublic; and

• Not detrimental to the minority shareholdersof the Company.

e. Review the annual financial statements of theGroup and the Company and making theappropriate recommendations relating thereto.

f. Review the internal audit reports prepared byMessrs. Ernst & Young, and the follow up onmanagement’s implementation of therecommended actions.

5. INTERNAL AUDIT FUNCTION

The Committee is aware that this internal audit functionis essential to assist in obtaining the assurance itrequires regarding the effectiveness of the system ofinternal controls. As such, during the previous financialperiod, the Committee appointed Messrs Ernst &Young to run its internal audit function.

The main role of the internal audit function is to reviewthe effectiveness of the system of internal controls andthis is performed with impartiality, proficiency and dueprofessional care.

A summary of internal audit activities performed byMessrs. Ernst & Young during the financial periodunder review is stated in the Statement on InternalControl on page 44 to 45 of the Annual Report.

3. MEETINGS

There were five (5) meetings of the Audit Committeeheld during the financial period ended 31 December2004 to which the attendance of each CommitteeMember is as follows:

Total Names of Meetings Committee Members attended

1. Y. Bhg. Datuk Haji Abdul Razak Bin Alias 4 out of 5

2. Tuan Haji Baharom Bin Abd Wahab 5 out of 5

3. Y. Bhg. Datuk Ng Peng Hay @ Ng Peng Hong 4 out of 5

4. Encik Mohd Khasan Bin Ahmad 5 out of 5

4. ACTIVITIES OF THE AUDIT COMMITTEE

During the financial period, the activities of theCommittee included:

a. Review the quarterly Group financial resultannouncements of the Group for each quarterprior to the Board of Directors’ approval.

b. Review the external auditors’ reports in relation toaudit and accounting issues arising from the audit,and updates of new developments on accountingstandards issued by the Malaysian AccountingStandards Board.

c. Review the audit plan of the external auditors.

d. Review the inter-company transactions and anyrelated/interested party transactions that may arisewithin the Company and the Group to ensurecompliance with Malaysian Accounting StandardsBoard, Bursa Malaysia Listing Requirements andother relevant statutory authorities and to ensurethat such transactions are:-

financial statements

Directors’ Report 53-56

Statement by Directors 57

Statutory Declaration 57

Report of the Auditors 58

Income Statements 59

Balance Sheets 60

Statements of Changes in Equity 61

Cash Flow Statements 62-63

Notes to the Financial Statements 64-99

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directors’ report

The directors have pleasure in presenting their report together with the audited financial statements of the Group and ofthe Company for the financial period ended 31 December 2004.

PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding and provision of management services. The principalactivities of the subsidiaries are described in Note 12 to the financial statements. There have been no significantchanges in the nature of the principal activities during the financial period.

RESULTS

Group CompanyRM'000 RM'000

Loss after taxation (34,797) (19,072)Minority interests 1,286 –

Net loss for the period (33,511) (19,072)

There were no material transfers to or from reserves or provisions during the financial period other than as disclosed inthe statements of changes in equity.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial periodwere not substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDEND

No dividend has been paid or declared by the Company since the end of the previous financial year. The directors donot recommend any dividend to be paid in respect of the current financial period.

DIRECTORS

The names of the directors of the Company in office since the date of the last report and at the date of this report are:

Fong Kok YongFong Kiah YeowFong Ngan TengFong Choon KaiNg Cheu KuanY. Bhg. Datuk Ng Peng Hay @ Ng Peng HongY. Bhg. Datuk Haji Abdul Razak Bin AliasBaharom Bin Abd WahabMohd. Khasan Bin Ahmad


54

DIRECTORS' BENEFITS

Neither at the end of the financial period, nor at any time during that period, did there subsist any arrangement to whichthe Company was a party, whereby the directors might acquire benefits by means of acquisition of shares in ordebentures of the Company or any other body corporate, other than those relating to warrants held by certain directorsentitling them to subscribe for new ordinary shares of RM1 each in the Company at an exercise price of RM5.95 pershare.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other thanbenefits included in the aggregate amount of emoluments received or due and receivable by the directors as shown inNote 6 to the financial statements or the fixed salary of a full-time employee of the Company) by reason of a contractmade by the Company or a related corporation with any director or with a firm of which he is a member, or with acompany in which he has a substantial financial interest other than deemed benefits which may be derived from thosetransactions disclosed in Note 29 to the financial statements.

DIRECTORS' INTERESTS

According to the register of directors' shareholdings, the interests of directors in office at the end of the financial periodin shares and warrants in the Company and in its related corporations during the financial period were as follows:

Number of Ordinary Shares of RM1 Each1.2.2004 Bought Sold 31.12.2004

The holding companyF.C.H. Holdings Sdn. Bhd. ("FCH")

Direct interestFong Kok Yong 85,000 – – 85,000 Fong Kiah Yeow 85,000 – – 85,000 Fong Ngan Teng 85,000 – – 85,000 Fong Choon Kai 85,000 – – 85,000

The Company

Direct interestY. Bhg. Datuk Ng Peng Hay

@ Ng Peng Hong 13,500 – – 13,500 Ng Cheu Kuan 19,000 – – 19,000 Baharom Bin Abd Wahab 4,500 – – 4,500

Indirect interestFong Kok Yong 20,348,705 * – – 20,348,705 Fong Kiah Yeow 20,348,705 * – – 20,348,705 Fong Ngan Teng 20,348,705 * – – 20,348,705 Fong Choon Kai 20,348,705 * – – 20,348,705

* Restated in accordance to Section 6A of Companies Act, 1965.

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DIRECTORS' INTERESTS (CONT’D)

Number of Warrants1.2.2004 Bought Sold 31.12.2004

The Company

Direct interestY. Bhg. Datuk Ng Peng Hay@ Ng Peng Hong 400 – – 400 Baharom Bin Abd Wahab 4,000 – – 4,000

Indirect interestFong Kok Yong 7,482 – – 7,482 Fong Kiah Yeow 7,482 – – 7,482 Fong Ngan Teng 7,482 – – 7,482 Fong Choon Kai 7,482 – – 7,482

By virtue of their interests in FCH, Fong Kok Yong, Fong Kiah Yeow, Fong Ngan Teng and Fong Choon Kai are deemedinterested in the shares of all the subsidiaries of the Company to the extent that FCH has an interest.

None of the other directors in office at the end of the financial period had any interest in shares in the Company or in itsrelated corporations during the financial period.

WARRANTS

On 21 October 1997, the Company issued 14,799,260 warrants in conjunction with the issue of RM50 millionRedeemable Guaranteed Bonds which have since been redeemed. Each warrant entitles the holder to subscribe for onenew ordinary share of RM1 each in the Company at an exercise price of RM5.95 per share within a period of four and ahalf years from the date of issue. The exercise price of the warrants is subject to adjustments from time to time inaccordance with the conditions stipulated in the Deed Poll.

Pursuant to a Supplemental Deed Poll dated 16 August 1999, the subscription period of the said warrants was extendedby a further five and a half years to expire on 17 September 2007.

As at 31 December 2004, the entire 14,799,260 warrants remained unexercised.

OTHER STATUTORY INFORMATION

(a) Before the income statements and balance sheets of the Group and of the Company were made out, the directorstook reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making ofprovision for doubtful debts and satisfied themselves that there were no known bad debts and that adequateprovision had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting recordsin the ordinary course of business had been written down to an amount which they might be expected so torealise.

(b) At the date of this report, the directors are not aware of any circumstances which would:

(i) require any amount to be written off as bad debts or render the amount of the provision for doubtful debtsinadequate to any substantial extent; and

(ii) render the values attributed to the current assets in the financial statements of the Group and of the Companymisleading.


56

OTHER STATUTORY INFORMATION (CONT’D)

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would renderadherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading orinappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report orfinancial statements of the Group and of the Company which would render any amount stated in the financialstatements misleading.

(e) At the date of this report, there does no exist:

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financialperiod which secures the liabilities of any other person; or

(ii) any contingent liability of the Group or of Company which has arisen since the end of the financial period.

(f) In the opinion of the directors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period oftwelve months after the end of the financial period which will or may affect the ability of the Group or of theCompany to meet their obligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of thefinancial period and the date of this report which is likely to affect substantially the results of the operations ofthe Group or of the Company for the financial period in which this report is made.

CHANGE OF FINANCIAL YEAR END

During the financial period, the Company changed its financial year end from 31 January to 31 December so as to becoterminous with the financial year end of its holding company.

AUDITORS

The auditors, Ernst & Young, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors

FONG KOK YONG FONG KIAH YEOW

Melaka, Malaysia27 April 2005

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We, FONG KOK YONG and FONG KIAH YEOW, being two of the directors of SINMAH RESOURCESBERHAD, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages59 to 99 are drawn up in accordance with applicable MASB Approved Accounting Standards in Malaysia and theprovisions of the Companies Act, 1965 so as to give a true and fair view of the financial position of the Group and ofthe Company as at 31 December 2004 and of the results and the cash flows of the Group and of the Company for theperiod then ended.

Signed on behalf of the Board in accordance with a resolution of the directors

FONG KOK YONG FONG KIAH YEOW


statutory declarationpursuant to Section 169(16) of the Companies Act, 1965

I, FONG KOK YONG, being the director primarily responsible for the financial management of SINMAHRESOURCES BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out onpages 59 to 99 are in my opinion, correct and I make this solemn declaration conscientiously believing the same to betrue and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by )the abovenamed, FONG KOK YONG, )at Melaka in the State of Melaka )on 27 April 2005. ) FONG KOK YONG

Before me,

A. SUPRAMANIAM PISCommissioner for Oaths

statement by directorspursuant to Section 169(15) of the Companies Act, 1965


58

We have audited the accompanying financial statements set out on pages 59 to 99. These financial statements are theresponsibility of the Company’s directors.

It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report ouropinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. Wedo not assume responsibility to any other person for the contents of this report.

We conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accounting principles used and significantestimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believethat our audit provides a reasonable basis for our opinion.

In our opinion:

(a) the financial statements have been properly drawn up in accordance with the provisions of the Companies Act,1965 and applicable MASB Approved Accounting Standards in Malaysia so as to give a true and fair view of:

(i) the financial position of the Group and of the Company as at 31 December 2004 and of the results and thecash flows of the Group and of the Company for the period then ended; and

(ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements;and

(b) the accounting and other records and the registers required by the Act to be kept by the Company and by itssubsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of theAct.

We have considered the financial statements and the auditors' reports thereon of the subsidiaries of which we have notacted as auditors, as indicated in Note 12 to the financial statements, being financial statements that have beenincluded in the consolidated financial statements.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financialstatements of the Company are in form and content appropriate and proper for the purposes of the preparation of theconsolidated financial statements and we have received satisfactory information and explanations required by us forthose purposes.

The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification material to theconsolidated financial statements and did not include any comment required to be made under Section 174 (3) of theAct.

Without qualifying our opinion, we draw attention to Note 2(a) to the financial statements which discloses that theaccompanying financial statements have been prepared assuming that the Group will continue as a going concern. Asat 31 December 2004, the Group’s current liabilities exceeded its current assets by approximately RM61.7 million. Theability of the Group to continue as a going concern is dependent upon the Group's ability in achieving future profitableoperations and generating sufficient cashflows from such operations to enable the Group to meet its liabilities as andwhen they fall due. The financial statements of the Group do not include any adjustments relating to the amounts andclassification of assets and liabilities that might be necessary should the Group be unable to continue as a goingconcern.

ERNST & YOUNG LEE AH TOOAF: 0039 No. 2187/09/05(J)Chartered Accountants Partner


report of the auditorsto the members of Sinmah Resources Berhad

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Group Company 1.2.2004 1.2.2003 1.2.2004 1.2.2003

to to to to Note 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Revenue 3 341,783 319,693 1,590 1,798 Cost of sales 4 (331,847) (272,026) – –

Gross profit 9,936 47,667 1,590 1,798 Other operating income 1,739 8,076 28 92 Selling, marketing, administrative

and general expenses (31,700) (32,474) (1,353) (2,813)Other operating expenses (2,408) – (19,262) (6,733)

(Loss)/profit from operations 5 (22,433) 23,269 (18,997) (7,656)Finance costs, net 8 (11,962) (13,247) (75) (41)Share of profit/(loss) of associates 34 (452) – –

(Loss)/profit before taxation (34,361) 9,570 (19,072) (7,697)Taxation :

Company and subsidiaries (414) (596) – (108)Associates (22) (61) – –

9 (436) (657) – (108)

(Loss)/profit after taxation (34,797) 8,913 (19,072) (7,805)Minority interests 1,286 (1,674) – –

Net (loss)/profit for the period/year (33,511) 7,239 (19,072) (7,805)

(Loss)/earnings per share :Basic (sen) 10 (66.3) 14.3

The accompanying notes form an integral part of the financial statements.

income statementsfor the period ended 31 December 2004


60

Group Company Note 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

NON-CURRENT ASSETS

Property, plant and equipment 11 160,864 167,306 1,030 1,588 Investment in subsidiaries 12 – – 28,061 28,061 Investment in associates 13 8,555 8,383 – – Other investments 14 62 62 – –Land held for property development 15 2,552 2,526 – – Goodwill on consolidation 16 – 2,408 – –

172,033 180,685 29,091 29,649

CURRENT ASSETS

Property development costs 15 11,026 21,465 – – Inventories 17 50,261 47,275 – – Trade receivables 18 102,870 100,140 – –Other receivables 19 15,212 30,270 63,033 84,274 Tax recoverable 1,680 1,319 649 649 Cash and bank balances 20 6,818 4,620 1 –

187,867 205,089 63,683 84,923

CURRENT LIABILITIES

Short term borrowings 21 146,615 165,556 17,153 17,045 Trade payables 23 72,473 53,977 – – Other payables 24 29,706 22,510 3,716 1,762 Tax payable 745 311 – –

249,539 242,354 20,869 18,807

NET CURRENT (LIABILITIES)/ASSETS (61,672) (37,265) 42,814 66,116

110,361 143,420 71,905 95,765

FINANCED BY:

Share capital 25 50,530 50,530 50,530 50,530 Share premium 26 61,584 61,584 61,584 61,584 Foreign exchange reserve 27 (131) (238) – – Accumulated losses (50,057) (16,546) (62,520) (43,448)

Shareholders’ equity 61,926 95,330 49,594 68,666 Minority interests 6,234 7,520 – –

68,160 102,850 49,594 68,666

Long term borrowings 21 38,944 36,027 22,311 27,099 Deferred tax liabilities 28 3,257 4,543 – –

Non-current liabilities 42,201 40,570 22,311 27,099

110,361 143,420 71,905 95,765


balance sheetsas at 31 December 2004

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Foreign Share Share exchange Accumulated capital premium reserve losses Total RM'000 RM'000 RM'000 RM'000 RM'000

Group

At 1 February 2003 50,530 61,584 (228) (23,785) 88,101 Currency translation

differences representing netloss not recognised in the income statement – – (10) – (10)

Net profit for the year – – – 7,239 7,239

At 31 January 2004 50,530 61,584 (238) (16,546) 95,330 Currency translation

differences representing netprofit not recognised in the income statement – – 107 – 107

Net loss for the period – – – (33,511) (33,511)

At 31 December 2004 50,530 61,584 (131) (50,057) 61,926

Company

At 1 February 2003 50,530 61,584 – (35,643) 76,471 Net loss for the year – – – (7,805) (7,805)

At 31 January 2004 50,530 61,584 – (43,448) 68,666 Net loss for the period – – – (19,072) (19,072)

At 31 December 2004 50,530 61,584 – (62,520) 49,594


statements of changes in equityfor the period ended 31 December 2004


62

Group Company 1.2.2004 1.2.2003 1.2.2004 1.2.2003

to to to to 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

CASH FLOWS FROM OPERATING ACTIVITIES

(Loss)/profit before taxation (34,361) 9,570 (19,072) (7,697)Adjustments for:Depreciation 11,128 11,151 124 138 Gain on disposal of property, plant and equipment (1,642) (2,367) (2) (47)Gain on disposal of other investments – (3) – – Impairment of goodwill 2,408 – – – Provision for doubtful debts 1,985 365 19,263 4,033 Dividend income (2) (2) – (1,350)Impairment of investment in subsidiaries – – – 2,700 Interest expense 12,067 13,460 75 200 Interest income (105) (213) – (159)Loan waived by licensed bank – (3,537) – – Share of (profit)/loss of associates (34) 452 – –

Operating (loss)/profit before working capital changes (8,556) 28,876 388 (2,182)Decrease in property development costs 10,413 1,255 – – Increase in inventories (2,986) (10,086) – – Decrease/(increase) in receivables 10,343 (7,124) (514) 3,993 Increase/(decrease) in payables 25,692 8,971 (724) (763)

Cash generated from/(used in) operations 34,906 21,892 (850) 1,048 Interest paid (12,067) (13,460) (75) (200)Tax paid (1,627) (2,232) – –

Net cash generated from/(used in) operating activities 21,212 6,200 (925) 848

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (4,891) (4,344) (38) (66)Purchase of additional shares in subsidiary – (252) – –Acquisition of associate (160) – – – Proceeds from disposal of property, plant and equipment 3,260 14,437 528 51 Proceeds from disposal of other investments – 15 – – Dividend received 2 2 – –Interest received 105 54 – –

Net cash (used in)/generated from investing activities (1,684) 9,912 490 (15)

cash flow statementsfor the period ended 31 December 2004

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Group Company 1.2.2004 1.2.2003 1.2.2004 1.2.2003

to to to to 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

CASH FLOWS FROM FINANCING ACTIVITIES

Holding company's account – (4) – –Subsidiaries' accounts – – 5,170 1,412 Payment of dividend to minority shareholders – (180) – –Repayment of revolving credit – (37,000) – (37,000)Repayment of hire purchase payables (1,295) (996) (27) (17)Drawdown of term loan 11,750 37,000 – 37,000 Repayment of term loans (5,904) (3,755) (4,200) (2,800)Short term borrowings (18,205) (3,011) – –

Net cash (used in)/generated from financing activities (13,654) (7,946) 943 (1,405)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 5,874 8,166 508 (572)

EFFECTS OF EXCHANGE RATE CHANGES 115 49 – –CASH AND CASH EQUIVALENTS AT

BEGINNING OF PERIOD/YEAR (32,512) (40,727) (9,816) (9,244)

CASH AND CASH EQUIVALENTS AT END OF PERIOD/YEAR (NOTE 20) (26,523) (32,512) (9,308) (9,816)


cash flow statementsfor the period ended 31 December 2004 (cont’d)


64

1. CORPORATE INFORMATION

The principal activities of the Company are investment holding and provision of management services. Theprincipal activities of the subsidiaries are described in Note 12. There have been no significant changes in thenature of the principal activities during the financial period.

The Company is a public limited liability company incorporated and domiciled in Malaysia and is listed on theSecond Board of Bursa Malaysia Securities Berhad. The registered office of the Company is located at AG 5730,Alor Gajah Industrial Estate, Alor Gajah, 78000 Melaka.

The directors regard F.C.H. Holdings Sdn. Bhd., a company incorporated in Malaysia, to be its immediate andultimate holding company.

The numbers of employees in the Group and in the Company at the end of the period/year were 1,990 (31.1.2004 :1,790) and 31 (31.1.2004 : 32) respectively.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of thedirectors on 27 April 2005.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

The financial statements have been prepared assuming that the Group will continue as a going concern. As at31 December 2004, the Group’s current liabilities exceeded its current assets by approximately RM61.7 million.The ability of the Group to continue as a going concern is dependent upon the Group's ability in achievingfuture profitable operations and generating sufficient cashflows from such operations to enable the Group tomeet its liabilities as and when they fall due. The financial statements of the Group do not include anyadjustments relating to the amounts and classification of assets and liabilities that might be necessary shouldthe Group be unable to continue as a going concern.

The financial statements of the Group and of the Company have been prepared under the historical costconvention.

The financial statements comply with the provisions of the Companies Act, 1965 and applicable MASBApproved Accounting Standards in Malaysia.

During the financial period, the Company adopted the following MASB Standards for the first time:

MASB 31 Accounting for Government Grants and Disclosure of Government AssistanceMASB 32 Property Development Activities

The adoption of MASB 31 and MASB 32 has not given rise to any adjustments to the opening balances ofaccumulated losses of the prior year and of the current period except that certain comparatives have eitherbeen presented for the first time or reclassified as disclosed in Note 33.

(b) Basis of Consolidation

(i) Subsidiaries

The consolidated financial statements include the financial statements of the Company and all itssubsidiaries. Subsidiaries are those companies in which the Group has power to exercise control over thefinancial and operating policies so as to obtain benefits from their activities.

notes to the financial statements31 December 2004

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2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(b) Basis of Consolidation (cont’d)

(i) Subsidiaries (cont’d)

Subsidiaries are consolidated using the acquisition method of accounting. Under the acquisition method ofaccounting, the results of subsidiaries acquired or disposed of during the year are included in theconsolidated income statement from the effective date of acquisition or up to the effective date of disposal,as appropriate. The assets and liabilities of a subsidiary are measured at their fair values at the date ofacquisition and these values are reflected in the consolidated balance sheet.

Intra-group transactions, balances and resulting unrealised gains are eliminated on consolidation and theconsolidated financial statements reflect external transactions only. Unrealised losses are eliminated onconsolidation unless costs cannot be recovered.

The gain or loss on disposal of a subsidiary is the difference between net disposal proceeds and theGroup’s share of its net assets together with any unamortised balance of goodwill and exchangedifferences.

As allowed by the transitional provisions of MASB 21 Business Combination, minority interest is measuredat the minorities' share of the pre-acquisition carrying values of the identifiable assets and liabilities ofsubsidiaries acquired on or prior to 31 January 2002. For subsidiaries acquired subsequent to 31 January2002, minority interest is measured at the minorities share of the post-acquisition fair values of theidentifiable assets and liabilities of the subsidiaries.

(ii) Associates

Associates are those entities in which the Group exercises significant influence but not control, throughparticipation in the financial and operating policy decisions of the entity.

Investments in associates are accounted for in the consolidated financial statements using the equitymethod of accounting based on the audited or management financial statements of the associates. Underthe equity method of accounting, the Group's share of profits less losses of associates during the year isincluded in the consolidated income statement. The Group’s interest in associates is carried in theconsolidated balance sheet at cost plus the Group’s share of post-acquisition retained profits oraccumulated losses and other reserves.

Unrealised gains on transactions between the Group and the associates are eliminated to the extent of theGroup’s interest in the associates. Unrealised losses are eliminated unless cost cannot be recovered.

(c) Goodwill

Goodwill represents the excess of the cost of acquisition over the Group’s interest in the fair value of theidentifiable assets and liabilities of a subsidiary or associate at the date of acquisition, while negative goodwillrepresents the excess of the Group's interest in the fair value of the identifiable assets and liabilities of asubsidiary or associate at the date of acquisition over the cost of acquisition.

Goodwill is stated at cost less impairment losses and negative goodwill is stated at cost. The policy for therecognition and measurement of impairment losses is in accordance with Note 2(o). Goodwill or negativegoodwill arising on the acquisition of subsidiaries is presented separately in the balance sheet while goodwill ornegative goodwill arising on the acquisition of associate is included within the carrying amount of investment inassociates. Goodwill or negative goodwill is not amortised.


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(d) Investments in Subsidiaries and Associates

The Company’s investments in subsidiaries and associates are stated at cost less impairment losses. Thepolicy for the recognition and measurement of impairment losses is in accordance with Note 2(o).

On disposal of such investments, the difference between the net disposal proceeds and their carrying amountsis recognised in the income statement.

(e) Property, Plant and Equipment and Depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Thepolicy for the recognition and measurement of impairment losses is in accordance with Note 2(o).

Freehold land and capital work-in-progress are not depreciated. Leasehold land is depreciated on a straightline basis over the periods of the respective leases which range from 80 years to 99 years. Depreciation ofother property, plant and equipment is provided for on a straight line basis to write off the cost of each assetto its residual value over the estimated useful life at the following annual rates:

Buildings 2% – 10%Motor vehicles 10% – 20%Piping, fencing and tubewell 15%Plant and machinery 2% – 20%Electrical installation 5% – 10%Furniture, fixtures and fittings 10%Office equipment 5% – 20%Renovation and improvement 5%

Upon the disposal of an item of property, plant or equipment, the difference between the net disposal proceedsand the net carrying amount is recognised in the income statement.

(f) Land Held for Property Development and Property Development Costs

(i) Land held for property development

Land held for property development consists of land where no development activities have been carriedout or where development activities are not expected to be completed within the normal operating cycle.Such land is classified within non-current assets and is stated at cost less any accumulated impairmentlosses. The policy for the recognition and measurement of impairment losses is in accordance with Note2(o).

Land held for property development is reclassified as property development costs at the point whendevelopment activities have commenced and where it can be demonstrated that the development activitiescan be completed within the normal operating cycle.

(ii) Property development costs

Property development costs comprise all costs that are directly attributable to development activities orthat can be allocated on a reasonable basis to such activities.

When the financial outcome of a development activity can be reliably estimated, property developmentrevenue and expenses are recognised in the income statement by using the stage of completion method.The stage of completion is determined by the proportion that property development costs incurred for workperformed to date bear to the estimated total property development costs.

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(f) Land Held for Property Development and Property Development Costs (cont’d)

(ii) Property development costs (cont’d)

Where the financial outcome of a development activity cannot be reliably estimated, property developmentrevenue is recognised only to the extent of property development costs incurred that is probable will berecoverable, and property development costs on properties sold are recognised as an expense in theperiod in which they are incurred.

Any expected loss on a development project, including costs to be incurred over the defects liabilityperiod, is recognised as an expense immediately.

Property development costs not recognised as an expense are recognised as an asset, which is measuredat the lower of cost and net realisable value.

The excess of revenue recognised in the income statement over billings to purchasers is classified asaccrued billings within trade receivables and the excess of billings to purchasers over revenue recognisedin the income statement is classified as progress billings within trade payables.

(g) Construction Contracts

Where the outcome of a construction contract can be estimated reliably, contract revenue and contract costsare recognised as revenue and expenses respectively by reference to the stage of completion of the contractactivity at the balance sheet date. The stage of completion is measured by reference to the proportion ofcontract costs incurred for work performed to date to the estimated total contract costs.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised tothe extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised asan expense in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognisedas an expense immediately.

When the total of costs incurred on construction contracts plus recognised profits (less recognised losses)exceeds progress billings, the balance is classified as amount due from customers on contracts. Whenprogress billings exceed costs incurred plus recognised profits (less recognised losses), the balance isclassified as amount due to customers on contracts.

(h) Inventories

Inventories are stated at the lower of cost and net realisable values. Net realisable value represents theestimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling anddistribution.

Cost of raw materials, medical and consumable supplies and finished goods (determined on the weightedaverage basis) consists of the original purchase price plus the costs of bringing the stocks to their presentlocation.

Breeder and layer stocks are stated at cost (determined on a first-in, first-out basis) adjusted for amortisationwhich is calculated based on the economic egg-laying lives less net realisable value. Cost includes cost ofday old chicks, feed, medication, labour and attributable overheads to the point of maturity.


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(h) Inventories (cont’d)

Pullet and broiler stocks consist of original purchase price of day-old chicks plus growing costs which includefeed and vaccines, direct labour costs and a proportion of farm overheads.

Cost of hatching eggs, processed chickens and feed (determined on the weighted average basis) includematerials, labour and a proportion of overhead costs.

Cost of completed shops and houses include land costs, construction costs and direct expenses incurredduring the period of development (determined on the specific identification basis).

(i) Cash and Cash Equivalents

For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at banks,deposits at call and short term highly liquid investments which have an insignificant risk of changes in value,net of outstanding bank overdrafts.

(j) Hire Purchase

Assets acquired by way of hire purchase are stated at an amount equal to the lower of their fair values andthe present value of the minimum hire purchase payments at the inception of the hire purchase, lessaccumulated depreciation and impairment losses. The corresponding liability is included in the balance sheetas borrowings. In calculating the present value of the minimum hire purchase payments, the discount factorused is the interest rate implicit in the hire purchase, when it is practicable to determine; otherwise, theincremental borrowing rate is used.

Hire purchase payments are apportioned between the finance costs and the reduction of the outstandingliability. Finance costs, which represent the difference between the total hire purchase commitments and thefair value of the assets acquired, are recognised as an expense in the income statement over the term of therelevant hire purchase so as to produce a constant periodic rate of charge on the remaining balance of theobligations for each accounting period.

The depreciation policy for hire purchase assets is in accordance with that for depreciable property, plant andequipment as described in Note 2(e).

(k) Income Tax

Income tax on the profit or loss for the period comprises current and deferred tax. Current tax is the expectedamount of income taxes payable in respect of the taxable profit for the period and is measured using the taxrates that have been enacted at the balance sheet date.

Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet datebetween the tax bases of assets and liabilities and their carrying amounts in the financial statements. Inprinciple, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets arerecognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent thatit is probable that taxable profit will be available against which the deductible temporary differences, unusedtax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary differencearises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transactionwhich is not a business combination and at the time of the transaction, affects neither accounting profit nortaxable profit.

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(k) Income Tax (cont’d)

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised orthe liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheetdate. Deferred tax is recognised in the income statement, except when it arises from a transaction which isrecognised directly in equity, in which case the deferred tax is also recognised directly in equity, or when itarises from a business combination that is an acquisition, in which case the deferred tax is included in theresulting goodwill or negative goodwill.

(l) Employee Benefits

(i) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the period inwhich the associated services are rendered by employees of the Group. Short term accumulatingcompensated absences such as paid annual leave are recognised when services are rendered byemployees that increase their entitlement to future compensated absences. Short term non-accumulatingcompensated absences such as sick leave are recognised when the absences occur.

(ii) Defined contribution plans

As required by law, companies in Malaysia make contributions to the Employees Provident Fund ("EPF").Such contributions are recognised as an expense in the income statement as incurred.

(m) Revenue Recognition

Revenue is recognised when it is probable that the economic benefits associated with the transaction will flowto the enterprise and the amount of the revenue can be measured reliably.

(i) Sale of goods

Revenue relating to sale of goods is recognised net of sales taxes and discounts upon the transfer of risksand rewards.

(ii) Income from property development and construction

Income from sale of development properties and construction contracts are accounted for under the stageof completion method. The stage of completion is determined by reference to the proportion of total costincurred to-date to the total estimated costs where the outcome of the projects can be reliably estimated.All anticipated losses are fully provided for.

(iii) Interest income

Interest is recognised on a time proportion basis that reflects the effective yield on the asset.

(iv) Dividend income

Dividend income is recognised when the right to receive payment is established.

(v) Rental income

Rental income is recognised on the accrual basis.


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(m) Revenue Recognition (cont’d)

(vi) Revenue from management services

Management fee is recognised net of any service taxes and discounts as and when the services areperformed.

(n) Foreign Currencies

(i) Foreign currency transactions

Transactions in foreign currencies are initially recorded in Ringgit Malaysia at exchange rates ruling at thedates of transaction . At each balance sheet date, foreign currency monetary items are reported in RinggitMalaysia at exchange rates ruling at that date. Non-monetary items initially denominated in foreigncurrencies, which are carried at historical cost are recorded using the historical rate as of the date ofacquisition and non-monetary items which are carried at fair values are recorded using the exchange ratethat existed when the values were determined.

All exchange rate differences are taken to the income statement.

(ii) Foreign entities

Financial statements of foreign consolidated subsidiaries are translated at exchange rates ruling at thebalance sheet date with respect to the assets and liabilities, and at exchange rates ruling at the dates ofthe transactions with respect to the income statement. All resulting translation differences are included inthe foreign exchange reserve in shareholders’ equity.

Goodwill arising on the acquisition of a foreign entity are treated as assets of the Group and translated atthe exchange rates ruling at the date of the transaction.

The principal exchange rates for every unit of foreign currency ruling at balance sheet date used are asfollows:

31.12.2004 31.1.2004 RM RM

United States Dollar 3.80 3.80 Philippines Peso 0.07 0.07 Singapore Dollar 2.33 2.21 China, Yuan Renminbi 0.46 0.46

(o) Impairment of Assets

At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether thereis any indication of impairment. If any such indication exists, impairment is measured by comparing thecarrying values of the assets with their recoverable amounts. Recoverable amount is the higher of net sellingprice and value in use, which is measured by reference to discounted future cash flows.

An impairment loss is recognised as an expense in the income statement immediately. Reversal of impairmentlosses recognised in prior years is recorded when the impairment losses recognised for the asset no longerexist or have decreased.

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(p) Financial Instruments

Financial instruments are recognised in the balance sheet when the Group has become a party to thecontractual provisions of the instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractualarrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, arereported as expense or income. Distributions to holders of financial instruments classified as equity arerecognised directly in equity. Financial instruments are offset when the Group has a legally enforceable right tooffset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

(i) Other Non-Current Investments

Non-current investments other than investments in subsidiaries and associates are stated at cost lessimpairment losses. The policy for the recognition and measurement of impairment losses is in accordancewith Note 2(o).

On disposal of an investment, the difference between the net disposal proceeds and its carrying amount isrecognised in the income statement.

(ii) Trade Receivables

Trade receivables are carried at anticipated realisable values. Bad debts are written off when identified. Anestimate is made for doubtful debts based on a review of all outstanding amounts as at the balance sheetdate.

(iii) Trade Payables

Trade payables are stated at cost which is the fair value of the consideration to be paid in the future forgoods and services received.

(iv) Interest-Bearing Borrowings

Interest-bearing loans and overdrafts are recorded at the amount of proceeds received, net of transactioncosts.

Borrowing costs directly attributable to the acquisition and construction of development properties andproperty, plant and equipment are capitalised as part of the cost of those assets, until such time as theassets are substantially ready for their intended use or sale. All other borrowing costs are recognised asan expense in the income statement in the period in which they are incurred.

(v) Equity Instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in theperiod in which they are declared.

The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax.Equity transaction costs comprise only those incremental external costs directly attributable to the equitytransaction which would otherwise have been avoided.


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3. REVENUE

Group Company 1.2.2004 1.2.2003 1.2.2004 1.2.2003

to to to to 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Sales of goods net of discounts 311,059 302,731 – – Property development 30,724 16,962 – – Management fees receivable – – 330 448 Procurement and project management fee – – 1,260 – Gross dividends received from subsidiaries – – – 1,350

341,783 319,693 1,590 1,798

4. COST OF SALES

Group Company 1.2.2004 1.2.2003 1.2.2004 1.2.2003

to to to to 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Inventories sold 315,549 258,971 – –Development properties sold 16,298 13,055 – –

331,847 272,026 – –

5. (LOSS)/PROFIT FROM OPERATIONS (CONT’D)

(Loss)/profit from operations is stated after charging/(crediting) :

Group Company 1.2.2004 1.2.2003 1.2.2004 1.2.2003

to to to to 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Auditors’ remuneration– statutory audits 134 134 12 12 – other services 138 135 65 57 Depreciation 11,128 11,151 124 138 Provision for doubtful debts – amount due from subsidiaries – – 19,263 4,033 – others 1,985 365 – – Loan waived by licensed bank – (3,537) – – Executive directors' emoluments (Note 6) 3,801 4,068 – – Non-executive directors’ emoluments (Note 6) 84 84 84 84 Gross dividend income from shares quoted

in Malaysia (2) (2) – (1,350)Impairment of goodwill 2,408 – – – Gain on disposal of property, plant and equipment (1,642) (2,367) (2) (47)Gain on disposal of other investments – (3) – –

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5. (LOSS)/PROFIT FROM OPERATIONS

Group Company 1.2.2004 1.2.2003 1.2.2004 1.2.2003

to to to to 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Gain on foreign exchange (realised) (399) (702) – – Impairment of investment in subsidiaries – – – 2,700 Rental expenses 5,412 3,521 – – Rental income (286) (232) (26) (44)Other staff costs (Note 7) 27,026 24,614 683 821

6. DIRECTORS’ EMOLUMENTS

Group Company 1.2.2004 1.2.2003 1.2.2004 1.2.2003

to to to to 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Directors of the CompanySalaries and other emoluments 2,061 2,106 – –Fees 84 84 84 84 Pension costs – defined contribution plan 247 253 – –

2,392 2,443 84 84 Other directors of subsidiariesSalaries and other emoluments 1,340 1,555 – –Pension costs – defined contribution plan 153 154 – –

1,493 1,709 – –

Total directors' emoluments 3,885 4,152 84 84

Analysis :Executive directors' emoluments (Note 5) 3,801 4,068 – – Non-executive directors' emoluments (Note 5) 84 84 84 84

3,885 4,152 84 84

The above emoluments do not include the monetary value of benefits-in-kind for the Group in respect of thedirectors of the Company of RM5,000 (31.1.2004 : RM5,000) and of other directors of subsidiaries of RM33,000(31.1.2004 : RM27,000) respectively.


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6. DIRECTORS’ EMOLUMENTS (CONT’D)

The number of directors of the Company with total emoluments within the following bands is as follows :

Number of directors 31.12.2004 31.1.2004

Executive directors:RM200,001 to RM250,000 2 2 RM450,001 to RM500,000 4 4

Non-executive directors:Below RM50,000 3 3

9 9

7. OTHER STAFF COSTS

Group Company 1.2.2004 1.2.2003 1.2.2004 1.2.2003

to to to to 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Wages and salaries 23,646 21,673 578 716 Pension costs - defined contribution plan 1,910 1,936 69 80 Other staff related expenses 1,470 1,005 36 25

27,026 24,614 683 821

8. FINANCE COSTS, NET

Group Company 1.2.2004 1.2.2003 1.2.2004 1.2.2003

to to to to 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Interest expense 12,144 13,460 1,986 2,155 Interest recouped from:– holding company (77) – (77) – – subsidiaries – – (1,834) (1,955)Interest income (105) (213) – (159)

11,962 13,247 75 41

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9. TAXATION

Group Company 1.2.2004 1.2.2003 1.2.2004 1.2.2003

to to to to 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Tax expense for the period/year:Malaysian income tax 1,891 1,262 – 108 (Over)/underprovided in prior years (169) 150 – –

1,722 1,412 – 108

Deferred tax (Note 28):Relating to origination and reversal

of temporary differences (1,431) (305) – – Relating to reduction in income tax rate – (12) – – Under/(over)provided in prior years 145 (438) – –

(1,286) (755) – –

436 657 – 108

Domestic income tax is calculated at Malaysian statutory tax rate of 28% (31.1.2004 : 28%) of the estimatedassessable profit for the period/year. Taxation for other jurisdictions is calculated at the rates prevailing in therespective jurisdictions.

A reconciliation of income tax expense applicable to (loss)/profit before taxation at the statutory income tax rate toincome tax expense at the effective income tax rate of the Group and of the Company is as follows:

Group Company 1.2.2004 1.2.2003 1.2.2004 1.2.2003

to to to to 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

(Loss)/profit before taxation (34,361) 9,570 (19,072) (7,697)

Taxation at Malaysian statutory tax rate of 28% (31.1.2004 : 28%) (9,621) 2,679 (5,340) (2,155)

Effect of income at Malaysian tax rate of 20% (31.1.2004 : 20%) (160) (195) – –

Effect of opening deferred tax of change in effective tax rate – (12) – –

Effect of different tax rates in other countries – (16) – – Effect of expenses not deductible for tax purposes 2,232 3,036 5,466 2,297 Effect of income not subject to tax – (1,124) – (9)Deferred tax asset recognised on unabsorbed

allowances previously not recognised (105) (2,250) – (25)Deferred tax asset not recognised on:– unutilised losses and unabsorbed allowances 2,675 1,021 – – – unabsorbed allowances previously recognised 5,866 – 13 –


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9. TAXATION (CONT’D)

Group Company 1.2.2004 1.2.2003 1.2.2004 1.2.2003

to to to to 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Effect of utilisation of:– current year reinvestment allowances (245) (144) – – – unabsorbed allowances and tax losses

previously not recognised (182) (2,050) (139) –(Over)/underprovision of income tax in prior years (169) 150 – – Under/(over) provision of deferred tax in prior years 145 (438) –

Tax expense for the period/year 436 657 – 108

Tax saving arising from utilisation of brought forward tax losses 57 1,018 – –

10. (LOSS)/EARNINGS PER SHARE

Basic (loss)/earnings per share is calculated by dividing the Group’s net loss for the period of RM32,982,000(31.1.2004 : profit of RM7,239,000) by 50,530,263 (31.1.2004 : 50,530,263) ordinary shares in issue during thefinancial period/year.

Fully diluted earnings per share on the basis of assumed conversion of warrants has not been disclosed as theeffect is anti-dilutive.

11. PROPERTY, PLANT AND EQUIPMENT

Plant * Land and and Motor ** Other

buildings machinery vehicles assets Total RM'000 RM'000 RM'000 RM'000 RM'000

Group

Cost

At 1 February 2004 108,550 124,256 18,042 13,053 263,901 Additions 1,801 2,852 1,224 435 6,312 Reclassification 188 – – (188) – Disposals (1,916) (2) (999) (31) (2,948)Translation difference (5) (11) (2) (2) (20)

At 31 December 2004 108,618 127,095 18,265 13,267 267,245

Accumulated Depreciation

At 1 February 2004 26,072 49,745 12,561 8,217 96,595 Charge for the period 3,866 5,274 1,268 720 11,128 Disposal (424) (1) (896) (9) (1,330)Translation difference (4) (5) (1) (2) (12)

At 31 December 2004 29,510 55,013 12,932 8,926 106,381

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11. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Plant * Land and and Motor ** Other

buildings machinery vehicles assets Total RM'000 RM'000 RM'000 RM'000 RM'000

Net Book ValueAt 31 December 2004 79,108 72,082 5,333 4,341 160,864

At 31 January 2004 82,478 74,511 5,481 4,836 167,306

Details at 1 February 2003Cost 120,981 122,755 17,794 13,313 274,843 Accumulated depreciation 25,547 43,985 13,036 7,708 90,276

Depreciation charge from1.2.2003 to 31.1.2004 3,597 5,940 954 660 11,151

** Other assets consist of furniture, fixtures and fittings, office equipment, piping, fencing and tubewell,renovations and improvements and capital work-in-progress. The cost of capital work-in-progress as at31.12.2004 was RM Nil (31.1.2004 : RM188,000).

* Analysis of land and buildings

Planting Long term and

Freehold leasehold development Group land land Buildings expenditure Total

RM'000 RM'000 RM'000 RM'000 RM'000

CostAt 1 February 2004 25,603 9,628 73,144 175 108,550 Additions 235 7 1,531 28 1,801 Reclassification – 126 62 – 188 Disposal (555) – (1,361) – (1,916)Translation difference – – (5) – (5)

At 31 December 2004 25,283 9,761 73,371 203 108,618

Accumulated DepreciationAt 1 February 2004 – 456 25,616 – 26,072 Charge for the period – 521 3,343 2 3,866 Disposal – – (424) – (424)Translation difference – – (4) – (4)

At 31 December 2004 – 977 28,531 2 29,510

Net Book ValueAt 31 December 2004 25,283 8,784 44,840 201 79,108

At 31 January 2004 25,603 9,172 47,528 175 82,478


Long Planting term and

Freehold leasehold development land land Buildings expenditure Total

RM'000 RM'000 RM'000 RM'000 RM'000

Details at 1 February 2003Cost 29,594 9,630 81,757 – 120,981 Accumulated depreciation – 408 25,139 – 25,547

Depreciation chargefrom 1.2.2003 to 31.1.2004 – 48 3,549 – 3,597

Motor Office Buildings vehicles equipment Total RM'000 RM'000 RM'000 RM'000

Company

CostAt 1 February 2004 1,207 495 548 2,250 Additions – 66 26 92 Disposal (607) (46) – (653)

At 31 December 2004 600 515 574 1,689

Accumulated DepreciationAt 1 February 2004 139 297 226 662 Charge for the period 19 53 52 124 Disposal (81) (46) – (127)

At 31 December 2004 77 304 278 659

Net Book ValueAt 31 December 2004 523 211 296 1,030

At 31 January 2004 1,068 198 322 1,588

Details at 1 February 2003Cost 1,188 478 551 2,217 Accumulated depreciation 115 408 175 698

Depreciation charge from 1.2.2003 to 31.1.2004 24 59 55 138


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(a) The net book values of property, plant and equipment of the Group pledged to financial institutions for bankborrowings as referred to in Note 21 are as follows:

31.12.2004 31.1.2004 RM'000 RM'000

Land and buildings 11,062 11,209 Plant and machinery 8,010 8,152 Other assets 450 547

19,522 19,908

Certain assets of the Group with net book value amounting to RM115,882,000 (31.1.2004 : RM94,378,000) weresubject to negative pledges in relation to banking facilities granted to the Group.

(b) Property, plant and equipment acquired during the period/year were by way of the following:

Group Company31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Outright purchase 4,891 4,344 38 66 Hire purchase financing 1,421 1,934 54 145

6,312 6,278 92 211

(c) The net book values of property, plant and equipment held under hire purchase are as follows:

Group Company31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 R M ' 0 0 0

Farm construction 627 673 – – Motor vehicles 2,715 3,144 191 162 Plant and machinery 2,671 2,265 – –

6,013 6,082 191 162

(d) Certain freehold land and motor vehicles of the Group with net book value of RM476,000 (31.1.2004 :RM895,000) are held in trust by third parties and certain directors of subsidiaries, namely Siah Kim Hew @ SiaKian Heng and Ng Hua Boon.

(e) Title deeds for certain long term leasehold land and building of the Group and of the Company with net bookvalue of RM8,197,000 (31.1.2004 : RM9,175,000) and RM523,000 (31.1.2004 : RM1,068,000) respectively arepending issuance from the relevant authorities.

(f) Subsequent to the balance sheet date, the Group obtained the release of charge on 2 pieces of freehold land,stated at cost of RM2,000,000 (31.01.2004 : RM2,000,000), and transferred the 2 pieces of freehold land backto the original vendors in full discharge of the amount due to them as disclosed in Note 24.


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12. INVESTMENT IN SUBSIDIARIES

Company31.12.2004 31.1.2004

RM'000 RM'000

Unquoted shares at cost 30,761 30,761 Less: Impairment in value (2,700) (2,700)

28,061 28,061

Details of the subsidiaries are as follows:

Country of Equity Interest Name of Subsidiary Incorporation Held (%) Principal Activities

31.12.2004 31.1.2004

Subsidiaries of the Company

Sinmah Multifeed Sdn. Bhd. Malaysia 99.99 99.99 Manufacturing and wholesale of animal feeds

Sinmah Breeders Sdn. Bhd. Malaysia 100 100 Poultry breeding and hatchery operations

Sinmah Livestocks Sdn. Bhd. Malaysia 100 100 Contract farming and trading of feeds, day old chicks and vaccines

Sinmah Food Industries Sdn. Bhd. Malaysia 100 100 Poultry processing, contract farming, marketing and distributionof poultry products

Sinmah Development Sdn. Bhd. Malaysia 100 100 Property development

Sinmah Egg Products Sdn. Bhd. Malaysia 100 100 Investment holding

Sinmah Ventures Sdn. Bhd. Malaysia 100 100 Investment holding

Farm’s Best Eggmart Sdn. Bhd. Malaysia 75 75 Trading of eggs

Lynbridge Sdn. Bhd. Malaysia 100 100 Dormant

Subsidiaries of Sinmah Livestocks Sdn. Bhd.

Chem Ventures Sdn. Bhd. Malaysia 75 75 Trading of chemicals medication and related equipment

Syarikat Perniagaan Suann Sdn. Bhd. Malaysia 51 51 Trading of feeds, medication and poultry farming

Joint Farming Sdn. Bhd. Malaysia 59 59 Poultry farming and trading of feedmeal, medication, day-old- chicks and broilers

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12. INVESTMENT IN SUBSIDIARIES (CONT’D)


31.12.2004 31.1.2004

Subsidiary of Syarikat Perniagaan Suann Sdn. Bhd.

Halal Poultry Meat Processing Malaysia 100 100 Poultry meat processingSdn. Bhd

Subsidiary of Sinmah Food Industries Sdn. Bhd.

SM Feed Technologies Sdn. Bhd. Malaysia 100 100 Temporarily ceased operations

Subsidiaries of Sinmah Development Sdn. Bhd.

Realtemas Realty Sdn. Bhd. Malaysia 100 100 Property development

Sinmah Builders Sdn. Bhd. Malaysia 100 100 Building and general contracting and provision of management services

Cosmal Enterprise Sdn. Bhd. Malaysia 100 100 Property development

Subsidiary of Sinmah Egg Products Sdn. Bhd.

Sinmah Poultry Farm Sdn. Bhd. Malaysia 51 51 Poultry farming and investment (formerly known as TTK Poultry holdingFarm Sdn. Bhd.)

Subsidiary of Sinmah Poultry Farm Sdn. Bhd. (formerly known as TTK Poultry Farm Sdn. Bhd.)

Premier Layer Breeders Sdn. Bhd. Malaysia 100 100 Dormant

Subsidiaries of Sinmah Ventures Sdn. Bhd.

Chix Unlimited Inc.* Philippines 51 51 Hatchery operations

FB Food (Nanjing) Pte. Ltd. * People's 70 70 International trade, import and Republic export of poultry products, value-of China added production and sales and

marketing

* Audited by firms of auditors other than Ernst & Young


82

12. INVESTMENT IN SUBSIDIARIES (CONT’D)

(a) The auditors' reports on the financial statements of the following subsidiaries emphasised that continuance ofthese subsidiaries as going concerns is dependent upon their future profitable operations and sufficientcashflows and the continued financial support from their holding companies:

i) Sinmah Food Industries Sdn. Bhd.ii) SM Feed Technologies Sdn. Bhd.iii) Sinmah Ventures Sdn. Bhd.iv) Sinmah Egg Products Sdn. Bhd.v) Sinmah Poultry Farm Sdn. Bhd. (formerly known as TTK Poultry Farm Sdn. Bhd.)vi) Premier Layer Breeders Sdn. Bhd.vii) Farm's Best Eggmart Sdn. Bhd.viii) Syarikat Perniagaan Suann Sdn. Bhd.ix) Halal Poultry Meat Processing Sdn. Bhd.x) Lynbridge Sdn. Bhd.

13. INVESTMENT IN ASSOCIATES

Group31.12.2004 31.1.2004

RM'000 RM'000

Unquoted shares, at cost 6,659 6,499 Share of post acquisition reserves 1,896 1,884

8,555 8,383

Represented by:

Share of net assets 6,332 6,160 Goodwill on acquisition 2,223 2,223

8,555 8,383

Details of the associates are as follows:


31.12.2004 31.1.2004

Sinmah Poultry Processing (S) Singapore 25 25 Poultry processing and trading in Pte. Ltd. poultry products

Ban Yen Sdn. Bhd. Malaysia 30.8 30.8 Poultry breeding and hatchery operations

SMNS Rubber Holdings Sdn. Bhd. Malaysia 49.9 49.9 Management of rubber small holdings

Farm's Goodness Sdn. Bhd. Malaysia 20 – Processing of poultry meat and trading of meat products

SINMAH RESOURCES

BERHAD (301653-V)

83

14. OTHER INVESTMENTS

Group31.12.2004 31.1.2004

RM'000 RM'000

Quoted shares in Malaysia, at cost 152 152 Less : Impairment in value (90) (90)

62 62

Market value of quoted shares in Malaysia 66 71

15. DEVELOPMENT PROPERTIES

(a) Land Held for Property DevelopmentGroup

31.12.2004 31.1.2004 RM'000 RM'000

CostAt beginning of period/year 2,526 2,512 Incurred during the period/year 26 14

At end of period/year 2,552 2,526

Comprising:Freehold land 2,178 2,178 Development expenditure 374 348

2,552 2,526

(b) Property Development Costs

Group31.12.2004 31.1.2004

RM'000 RM'000

CostAt beginning of period/year 50,230 36,908 Incurred during the period/year 9,679 13,322 Completed during the period/year (35,772) – Transferred to inventories (3,820) –


Comprising:Freehold land 6,898 19,041 Development expenditure 13,419 31,189

20,317 50,230


84

15. DEVELOPMENT PROPERTIES (CONT’D)

(b) Property Development Costs (cont’d)

Group31.12.2004 31.1.2004

RM'000 RM'000

Cost recognised in income statementAt beginning of period/year 28,765 15,710 Recognised in current period/year 16,298 13,055 Completed during the period/year (35,772) –


Net carrying value 11,026 21,465

16. GOODWILL ON CONSOLIDATION

Group31.12.2004 31.1.2004

RM'000 RM'000

Goodwill 11,314 11,314 Less : Accumulated impairment loss (5,922) (3,514)

5,392 7,800 Negative goodwill (5,392) (5,392)

– 2,408

17. INVENTORIES

Group31.12.2004 31.1.2004

RM'000 RM'000

At cost :Raw materials, medical supplies and chemicals 13,773 12,011 Poultry livestocks 14,640 13,503 Processed chickens 9,832 12,634 Hatching eggs 1,555 1,876 Consumable supplies 6,180 5,419 Completed houses and shops 3,865 1,582 Others 416 250

50,261 47,275

SINMAH RESOURCES

BERHAD (301653-V)

85

18. TRADE RECEIVABLES

Group31.12.2004 31.1.2004

RM'000 RM'000

Due from associates 3,473 448 Other trade receivables 116,612 117,419 Retention sums 1,327 874 Accrued billings in respect of property development costs 1,887 –

123,299 118,741 Less : Provision for doubtful debts (20,429) (18,601)

102,870 100,140

The Group’s normal trade credit terms range from 30 to 90 days. Other credit terms are assessed and approvedon a case-by-case basis.

The Group has no significant concentration of credit risk that may arise from exposures to a single debtor or togroups of debtors.

19. OTHER RECEIVABLES

Group Company31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Due from holding company 6,099 6,022 4,770 4,693 Due from subsidiaries– Dividend receivable – – – 972 – Others – – 113,501 115,021 Purchaser of property, plant and equipment 433 15,459 43 –Other receivables 3,769 5,016 23 17 Deposits and prepayments 4,911 3,773 23 25

15,212 30,270 118,750 120,728 Less : Provision for doubtful debts – – (55,717) (36,454)

15,212 30,270 63,033 84,274

The amount due from holding company is unsecured, has no fixed terms of repayment and is interest-free exceptthat interest of RM77,000 (31.1.2004 : interest-bearing at 3.5% per annum) was recouped from holding companyduring the period as disclosed in Note 8. The amounts due from subsidiaries are unsecured, have no fixed termsof repayment and are interest-free except that interest of RM1,834,000 (31.1.2004 : RM1,955,000) was recoupedfrom certain subsidiaries during the period/year as disclosed in Note 8.

There were no significant concentration of credit risk that may arise from exposures to a single debtor or to groupsof debtors except for exposures to the holding company and subsidiaries, the amounts of which account for 39%(31.1.2004 : 19%) and 99% (31.1.2004 : 99%) of the gross receivables of the Group and of the Companyrespectively.


86

20. CASH AND CASH EQUIVALENTS

Group Company31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Cash on hand and at banks 6,624 4,490 1 – Deposits with licensed banks 194 130 – –

6,818 4,620 1 – Less : Bank overdrafts (Note 21) (33,341) (37,132) (9,309) (9,816)

(26,523) (32,512) (9,308) (9,816)

Included in cash at banks of the Group is an amount of RM2,323,000 (31.1.2004 : RM477,000) held pursuant toSection 7A of the Housing Development (Control and Licensing) Act 1966 and therefore restricted from use in otheroperations.

Deposits with licensed banks of the Group are pledged to banks for banking facilities granted to the Group.

The weighted average effective interest rates and the average maturities of deposits at the balance sheet date wereas follows:

Weighted Average Average Interest Rates Maturities

(%) (Days) 31.12.2004 31.1.2004 31.12.2004 31.1.2004

Deposits with licensed banks 4.00 4.00 365 365

21. BORROWINGS – SECURED

Group Company31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Short Term BorrowingsBank overdrafts (Note 20) 33,341 37,132 9,309 9,816 Bankers’ acceptances 93,127 111,255 – –Term loans 13,260 10,138 7,801 7,200 Trust receipts 4,729 5,413 – –Al-Murabahah 607 – – – Hire purchase payables (Note 22) 1,551 1,618 43 29

146,615 165,556 17,153 17,045

Long Term BorrowingsTerm loans 37,473 34,748 22,199 27,000 Hire purchase payables (Note 22) 1,471 1,279 112 99

38,944 36,027 22,311 27,099

SINMAH RESOURCES

BERHAD (301653-V)

87

21. BORROWINGS – SECURED (CONT’D)

Group Company31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Total BorrowingsBank overdrafts 33,341 37,132 9,309 9,816 Bankers' acceptances 93,127 111,255 – –Term loans 50,733 44,886 30,000 34,200 Trust receipts 4,729 5,413 – –Al-Murabahah 607 – – –Hire purchase payables 3,022 2,897 155 128

185,559 201,583 39,464 44,144

Maturity of borrowings (excluding hire purchase)

Within one year 145,064 163,938 17,110 17,016 Later than one year and not later than 2 years 10,750 9,354 7,200 7,200 Later than 2 years and not later than 5 years 24,797 24,190 14,999 19,800 Later than 5 years 1,926 1,204 – –

182,537 198,686 39,309 44,016

The weighted average effective interest rates at the balance sheet date for borrowings, excluding hire purchasepayables, were as follows:

Group Company31.12.2004 31.1.2004 31.12.2004 31.1.2004

% % % %

Bank overdrafts 7.30 8.20 8.50 8.50 Bankers’ acceptances 2.63 3.84 – –Term loans 6.32 5.99 4.29 3.12 Trust receipts 8.26 10.00 – –

The borrowings of the Group are secured by way of fixed and floating charges and negative pledges over certainassets of the Group as disclosed in Note 11 and corporate guarantees given by the Company.

The term loans of the Company are secured against the following :

(i) Corporate guarantees from the Company's existing and future major operating subsidiaries;

(ii) Undertaking by the holding company to fully repay the facilities should the Company be unable to meet itsobligations;

(iii) Assignment of funds realised from the exercise of the Company's warrants; and

(iv) Cross defaults, rights of set-off, negative pledges and pari passu ranking with all other debts of the Company,except where the obligations are preferred by applicable laws.


88

22. HIRE PURCHASE PAYABLES

Group Company31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Minimum hire purchase paymentsNot later than one year 1,698 1,740 49 39 Later than one year and not later than 2 years 889 679 49 39 Later than 2 years and not later than 5 years 809 802 82 72

3,396 3,221 180 150 Less : Future finance charges (374) (324) (25) (22)

Present value of hire purchase liabilities 3,022 2,897 155 128

Present value of hire purchase liabilities Not later than one year 1,551 1,618 43 29 Later than one year and not later than 2 years 786 654 42 29 Later than 2 years and not later than 5 years 685 625 70 70

3,022 2,897 155 128

Analysed as Due within 12 months (Note 21) 1,551 1,618 43 29 Due after 12 months (Note 21) 1,471 1,279 112 99

3,022 2,897 155 128

Interest rate per annum 3.30 to 6.50 3.30 to 6.50 3.40 to 3.75 3.40

23. TRADE PAYABLES

Group31.12.2004 31.1.2004

RM'000 RM'000

Due to associates 1,298 969 Other trade creditors 69,852 51,788 Progress billings in respect of property development costs – 253 Retention sums 1,323 967

72,473 53,977

The normal trade credit terms granted to the Group range from 30 to 90 days.

SINMAH RESOURCES

BERHAD (301653-V)

89

24. OTHER PAYABLES

Group Company31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Due to subsidiaries * – – 3,011 333 Due to an associate * 43 27 – – Due to Tang Tze Kang Realty Sdn. Bhd.

and Maju Tangs Sdn. Bhd. * 2,000 2,000 – – Due to directors of subsidiary * 357 756 – – Supplier of property, plant and equipment 2,207 3,037 – – Other payables 20,796 12,594 522 1,165 Accruals 4,303 4,096 183 264

29,706 22,510 3,716 1,762

* Unsecured, interest-free and with no fixed terms of repayment.

Tang Tze Kang Realty Sdn. Bhd. and Maju Tangs Sdn. Bhd. are companies in which certain directors of asubsidiary, namely Tang Kian Woo and Tang Tok Woo, have interest. The amount is in respect of the purchase of 2pieces of freehold land in previous years. Subsequent to the balance sheet date, the Group transferred the 2 piecesof freehold land back to them in full discharge of the liability as mentioned in Note 11(f).

The above mentioned directors of a subsidiary are Siah Kim Hew @ Sia Kian Heng, Sia Keng Choon and Sia KianKoon.

25. SHARE CAPITAL

Number of Shares of RM1 Each Amount

31.12.2004 31.1.2004 31.12.2004 31.1.2004 '000 '000 RM'000 RM'000

Group and Company

Authorised 500,000 500,000 500,000 500,000

Number of Ordinary Shares of RM1 Each Amount

31.12.2004 31.1.2004 31.12.2004 31.1.2004 '000 '000 RM'000 RM'000

Issued and fully paid 50,530 50,530 50,530 50,530

Warrants

On 21 October 1997, the Company issued 14,799,260 warrants in conjunction with the issue of RM50 millionRedeemable Guaranteed Bonds which has since been redeemed. Each warrant entitles the holder to subscribe forone new ordinary share of RM1 each in the Company at an exercise price of RM5.95 per share within a period offour and a half years from the date of issue. The exercise price of the warrants is subject to adjustments from timeto time in accordance with the conditions stipulated in the Deed Poll.


90

25. SHARE CAPITAL (CONT’D)

Pursuant to a Supplemental Deed Poll dated 16 August 1999, the subscription period of the said warrants wasextended by a further five and a half years to expire on 17 September 2007.

As at 31 December 2004, the entire 14,799,260 warrants remained unexercised.

26. SHARE PREMIUM

This is a non-distributable reserve which arose from the issue of the Company's shares in previous years.

27. FOREIGN EXCHANGE RESERVE

This is a non-distributable reserve which comprises all foreign exchange differences arising from the translation offinancial statements of foreign subsidiaries.

28. DEFERRED TAX LIABILITIES

Group Company1.2.2004 1.2.2003 1.2.2004 1.2.2003

to to to to 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

At beginning of period/year 4,543 5,298 – – Recognised in income statements (Note 9) (1,286) (755) – –

At end of period/year 3,257 4,543 – –

The components and movements of deferred tax liabilities and assets during the financial period/year prior tooffsetting are as follows:

Group

At beginning Recognised At end of period/ in income of period

year statement year RM'000 RM'000 RM'000

1.2.2004 to 31.12.2004

Property, plant and equipment 25,977 (465) 25,512 Provision for interest receivable 44 – 44 Trade receivables – 73 73 Unutilised tax allowances (8,998) 5,272 (3,726)Unutilised tax losses (4,359) (56) (4,415)Unabsorbed capital allowances (8,121) (6,110) (14,231)

4,543 (1,286) 3,257

SINMAH RESOURCES

BERHAD (301653-V)

91

28. DEFERRED TAX LIABILITIES (CONT’D)

At beginning Recognised At end of period/ in income of period

year statement year RM'000 RM'000 RM'000

1.2.2003 to 31.1.2004

Property, plant and equipment 27,318 (1,341) 25,977 Provision for interest receivable – 44 44 Unutilised tax allowances (7,034) (1,964) (8,998)Unutilised tax losses (5,283) 924 (4,359)Unabsorbed capital allowances (9,703) 1,582 (8,121)

5,298 (755) 4,543

Company

1.2.2004 to 31.12.2004

Property, plant and equipment 74 (13) 61 Provision for interest receivable – 44 44 Unutilised tax losses – (25) (25)Unabsorbed capital allowances (74) (6) (80)

– – –

1.2.2003 to 31.1.2004

Property, plant and equipment 84 (10) 74 Unabsorbed capital allowances (84) 10 (74)

– – –

Deferred tax assets have not been recognised in respect of the following items:

Group31.12.2004 31.1.2004

RM'000 RM'000

Unutilised tax losses 69,412 56,818 Unabsorbed reinvestment allowances 26,183 26,858 Unabsorbed capital allowances 5,791 4,342 Unutilised investment tax allowances 29,862 8,545 Other temporary differences 26 26

131,274 96,589


92

28. DEFERRED TAX LIABILITIES (CONT’D)

CompanyUnabsorbed

Unused tax capital losses allowances RM'000 RM'000

31.12.2004

Amounts available for offset against future taxable profits 2,465 285 Recognised for deferred tax asset (90) (285)

Not recognised for deferred tax asset 2,375 –

31.1.2004

Amounts available for offset against future taxable profits 2,465 781 Recognised for deferred tax asset – (264)

Not recognised for deferred tax asset 2,465 517

The above items are available indefinitely for offset against future taxable profits of the subsidiaries in which theyarose.

29. SIGNIFICANT RELATED PARTY TRANSACTIONS

Group Company1.2.2004 1.2.2003 1.2.2004 1.2.2003

to to to to 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Transactions with holding companyInterest recouped 77 – 77 – Interest receivable – 159 – 159

Transactions with subsidiariesInterest recouped from:Sinmah Food Industries Sdn. Bhd. – – 695 526 Sinmah Multifeed Sdn. Bhd. ("SMSB") – – 24 1,067 Sinmah Development Sdn. Bhd. ("SDSB") – – 237 362 Cosmal Enterprise Sdn. Bhd. ("CESB") – – 1 – Sinmah Breeders Sdn. Bhd. – – 565 – Sinmah Livestocks Sdn. Bhd. ("SLSB") – – 73 –Sinmah Ventures Sdn. Bhd. – – 17 – Sinmah Eggs Products Sdn. Bhd. – – 222 –

SINMAH RESOURCES

BERHAD (301653-V)

93

29. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONT’D)

Group Company1.2.2004 1.2.2003 1.2.2004 1.2.2003

to to to to 31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Gross dividend from:SDSB – – – 1,200 SMSB – – – 150 Management fees from:SLSB – – – 240 SDSB – – 240 120 SMSB – – 18 16 Sinmah Builders Sdn. Bhd. ("SBSB") – – 72 36 CESB – – – 36 Procurement and project management fee from SBSB – – 1,260 –

Transactions with associatesSales to Sinmah Poultry Processing (S) Pte. Ltd. 5,684 10,481 – – Purchases from Ban Yen Sdn. Bhd. 4,154 5,854 – –

The directors are of the opinion that all the transactions above have been entered into in the normal course ofbusiness and have been established on terms and conditions that are not materially different from that obtainable intransactions with unrelated parties.

30. CONTINGENT LIABILITIES

Group Company31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Corporate guarantee issued to financial institutions for credit facilities granted to subsidiaries (unsecured) – – 135,620 164,562

Legal claim by supplier 2,398 2,398 – –

On 2 February 1999, a supplier filed a civil suit against the Company, for a claim for goods delivered amounting toapproximately RM2,398,000. The directors are of the opinion that such claim is without basis as the goods deliveredby the supplier were not of merchantable quality and unfit for its purpose and hence, no provision for any liabilitieshave been made in the financial statements. The matter has been fixed for further trial at a later date.


94

31. COMMITMENTS

Group Company31.12.2004 31.1.2004 31.12.2004 31.1.2004

RM'000 RM'000 RM'000 RM'000

Capital expenditure approved and contracted for:Property, plant and equipment 16,844 – 100 –

Future minimum lease payments on non-cancellable operating leases :

Within one year 1,875 1,875 – – Later than one year and not later than 2 years 1,875 1,875 – – Later than 2 years and not later than 5 years 5,625 5,625 – – Later than 5 years 6,719 8,438 – –

16,094 17,813 – –

32. SEGMENT INFORMATION

(a) Business segment

The Group is organised into two major business segments:

(i) Poultry – Manufacturing and wholesale of animal feeds, poultry breeding, hatchery operations, contractfarming, poultry processing and trading of feeds, day-old chicks, medications and vaccines.

(ii) Housing development – Development and construction of residential and commercial properties.

Other business segments include investment holding and provision of management services, none ofwhich are of a sufficient size to be reported separately.

The directors are of the opinion that all inter-segment transactions have been entered into in the normal courseof business and have been established on term and conditions that are not materially different from thatobtainable in transactions with unrelated parties.

SINMAH RESOURCES

BERHAD (301653-V)

95

32. SEGMENT INFORMATION (CONT’D)

(a) Business segment (cont’d)

1.2.2004 to 31.12.2004

Housing Poultry development Others Group RM'000 RM'000 RM'000 RM'000

Revenue

External sales 311,059 30,724 – 341,783

Results

(Loss)/profit from operations (26,758) 4,343 (18) (22,433)Finance costs, net (9,947) (106) (1,909) (11,962)Shares of results of associates 34 – – 34

(Loss)/profit before taxation (36,671) 4,237 (1,927) (34,361)Taxation 1,032 (1,468) – (436)

(Loss)/profit after tax (35,639) 2,769 (1,927) (34,797)Minority interests 1,286 – – 1,286

Net (loss)/profit for the period (34,353) 2,769 (1,927) (33,511)

Assets and liabilities

Segment assets 322,661 30,171 7,068 359,900

Segment liabilities 240,984 10,495 40,261 291,740

Other Information

Capital expenditure 6,029 191 92 6,312 Depreciation 10,873 112 143 11,128 Impairment of goodwill 2,408 – – 2,408 Non-cash expenses other than depreciation,

amortisation and impairment 1,985 – – 1,985


96

32. SEGMENT INFORMATION (CONT’D)

(a) Business segment (cont’d)

1.2.2003 to 31.1.2004

Housing Poultry development Others Group RM'000 RM'000 RM'000 RM'000

Revenue

External sales 302,731 16,962 – 319,693

Results

Profit/(loss) from operations 24,983 1,268 (2,982) 23,269 Finance costs, net (11,161) (89) (1,997) (13,247)Shares of results of associates (452) – – (452)

Profit/(loss) before taxation 13,370 1,179 (4,979) 9,570 Taxation 140 (797) – (657)

Profit/(loss) after tax 13,510 382 (4,979) 8,913 Minority interests (1,674) – – (1,674)

Net profit/(loss) for the year 11,836 382 (4,979) 7,239

Assets and liabilities

Segment assets 344,556 33,927 7,291 385,774

Segment liabilities 227,886 9,340 45,698 282,924

Other Information

Capital expenditure 5,045 898 335 6,278 Depreciation 10,916 89 146 11,151 Non-cash expenses other than depreciation

and amortisation 365 – – 365

(b) Secondary reporting segment – Geographical segments

As the Group's activities are principally conducted in Malaysia, segment reporting by geographical segment isnot prepared.

SINMAH RESOURCES

BERHAD (301653-V)

97

33. COMPARATIVES

During the period, the Company changed its financial year from 31 January to 31 December so as to becoterminous with the financial year end of its ultimate holding company. Accordingly, comparative amounts forincome statements, statements of changes in equity, cash flow statements and related notes are not comparable.

Following the adoption of MASB 32 as mentioned in Note 2(a), the following comparatives have been reclassifiedto conform with the current period's presentation:

Originally reported Reclassified RestatedRM'000 RM'000 RM'000

Balance Sheet – Group

Property development costs 21,212 253 21,465 Trade payables 53,724 253 53,977

34. FINANCIAL INSTRUMENTS

(a) Financial Risk Management Objectives and Policies

The Group’s financial risk management policy seeks to ensure that adequate financial resources are availablefor the development of the Group’s businesses whilst managing its interest rate, foreign exchange, liquidity andcredit risks. The Group operates within clearly defined guidelines and the Group’s policy is not to engage inspeculative transactions.

(b) Interest Rate Risk

The Group’s primary interest rate risk relates to interest-bearing debt, as the Group had no substantial long-term interest-bearing assets as at 31 December 2004.

The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rateborrowings. The Group actively reviews its debt portfolio, taking into account the investment holding periodand nature of its assets. This strategy allows it to capitalise on cheaper funding in a low interest rateenvironment and achieve a certain level of protection against interest rate hikes.

The information on maturity dates and effective interest rates of financial assets and liabilities are disclosed intheir respective notes.

(c) Foreign Exchange Risk

The Group is exposed to market fluctuations of various foreign currencies, mainly the United States Dollar andSingapore Dollar. Foreign currency denominated assets and liabilities together with expected cash flows frompurchases and sales give rise to foreign exchange exposures. Foreign exchange exposures in transactionalcurrencies other than functional currencies of the operating entities are kept to an acceptable level. The Groupdoes not enter into derivative foreign exchange contracts to hedge its foreign currency risk.


98

34. FINANCIAL INSTRUMENTS (CONT’D)

(c) Foreign Exchange Risk (con’d)

The unhedged financial assets/liabilities of the Group that are not denominated in their functional currencies areas follows:

Denominated in USD SGD Total

RM'000 RM'000 RM'000

31 December 2004

Trade receivables 322 2,400 2,722 Other receivables – – –

322 2,400 2,722

Trade payables 9,191 – 9,191 Borrowings 29,999 – 29,999

39,190 – 39,190

31 January 2004

Trade receivables – 415 415 Other receivables 503 – 503

503 415 918

Trade payables 4,266 – 4,266 Borrowings 34,200 – 34,200

38,466 – 38,466

(d) Liquidity Risk

The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so asto ensure that all refinancing, repayment and funding needs are met. As part of its overall prudent liquiditymanagement, the Group maintains sufficient levels of cash or cash convertible investments to meet its workingcapital requirements. In addition, the Group strives to maintain available banking facilities of a reasonable levelto its overall debt position. As far as possible, the Group raises committed funding from capital market andfinancial institutions and prudently balances its portfolio with some short term funding so as to achieve overallcost effectiveness.

SINMAH RESOURCES

BERHAD (301653-V)

99

34. FINANCIAL INSTRUMENTS (CONT’D)

(e) Credit Risk

Credit risk, or the risk of counterparties defaulting, is controlled by the application of credit approvals, limitsand monitoring procedures. Credit risks are minimised and monitored via strictly limiting the Group’sassociations to business partners with high creditworthiness. Trade receivables are monitored on an ongoingbasis via Group management reporting procedures.

The Group does not have any significant exposure to any individual customer or counterparty nor does it haveany major concentration of credit risk related to any financial instruments except as disclosed in Note 19.

(f) Fair Values

It is not practical to estimate the fair values of the Company's investment in subsidiaries and the Group'sinvestment in associates due to lack of quoted market prices and the inability to estimate fair values withoutincurring excessive costs.

It is also not practical to estimate the fair values of the amounts due from holding company and fromsubsidiaries as disclosed in Note 19, and the amounts due to subsidiaries and to companies in which certaindirectors of a subsidiary have interest as disclosed in Note 24, due to lack of repayment terms entered into bythe parties involved and the inability to estimate fair values without incurring excessive costs.

The fair value of long term borrowings approximate their book value as these borrowings are pegged to andvary with the prevailing market rates.

There are no material differences between the book values and the fair values of the Group's other financialassets and liabilities due to their relatively short term maturity.


100

statistics on shareholdingsas at 5 May 2005

AUTHORISED SHARE CAPITAL : RM 500,000,000ISSUED AND FULLY PAID UP CAPITAL : RM 50,530,263CLASS OF SHARES : ORDINARY SHARES OF RM1.00 EACHVOTING RIGHTS : ONE VOTE PER ORDINARY SHARE

ANALYSIS BY SIZE OF SHAREHOLDINGS AS AT 5 MAY 2005

Size of Shareholdings No. of Shareholders % No. of Shares %

Less than 100 110 2.25 1,258 0.00100 to 1,000 1,412 28.93 1,180,790 2.341,001 to 10,000 2,850 58.39 11,420,760 22.6010,001 to 100,000 481 9.86 12,678,850 25.09100,001 to less than 5% of issued shares 26 0.53 4,899,900 9.705% of issued shares and above 2 0.04 20,348,705 40.27

Total 4,881 100.00 50,530,263 100.00

THIRTY (30) LARGEST SHAREHOLDERS AS PER THE RECORD OF DEPOSITORS AS AT 5 MAY 2005

PercentageName No. of Shares (%)

1. Cimsec Nominees (Tempatan) Sdn Bhd 10,249,155 20.28- Pengurusan Danaharta National Berhad for F.C.H. Holdings Sdn Bhd

2. Cimsec Nominees (Tempatan) Sdn Bhd 10,099,550 19.99- Pengurusan Danaharta National Berhad for F.C.H. Holdings Sdn Bhd

3. TCL Nominees (Tempatan) Sdn Bhd 458,900 0.91- Pledged securities account for Teo Wee Kee

4. Mayban Nominees (Tempatan) Sdn Bhd 402,000 0.80- Pledged securities account for Robert Tan

5. Yeo Kiam Yam @ Yeo Kian Yam 365,000 0.72

6. Teh Sen Siew 284,700 0.56

7. Gew Chin Heng 239,300 0.47

8. Mayban Nominees (Tempatan) Sdn Bhd 236,000 0.47- Pledged securities account for Low Ngok Ming

9. TCL Nominees (Tempatan) Sdn Bhd 224,000 0.44- Pledged securities account for E Pian

10. OSK Nominees (Asing) Sdn Berhad 220,000 0.43- UOB Kay Hian Private Limited for Ng Sok Meng Evelyn

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THIRTY (30) LARGEST SHAREHOLDERS AS PER THE RECORD OF DEPOSITORS AS AT 5 MAY 2005(cont’d)

PercentageName No. of Shares (%)

11. Yeo Jin Hui 200,000 0.39

12. Bumiputra-Commerce Trustee Berhad 200,000 0.39- Amanah Saham Darul Iman

13. Eueh Soy Ing 175,900 0.35

14. OSK Nominees (Asing) Sdn Berhad 160,000 0.32- UOB Kay Hian Private Limited for Wong Fong Hong

15. TA Nominees (Tempatan) Sdn Bhd 150,000 0.30- Pledged securities account for Loh Tai Cheong @ Chin Tai Cheong

16. Suffian Bin Othman @ Heng Fok Boon 150,000 0.30

17. HSBC Nominees (Asing) Sdn Bhd 150,000 0.30- Global Base Industries Limited

18. TA Nominees (Tempatan) Sdn Bhd 142,000 0.28- Pledged securities account for Tan Siew Tin

19. MIDF Sisma Nominees (Tempatan) Sdn Bhd 136,800 0.27- Pledged securities account for Lim Geok Hoon

20. Permodalan Nasional Berhad 123,200 0.24

21. K Leela A/P S.R Krishnan 122,800 0.24

22. Tai Lee Fah 115,000 0.23

23. Toh Cheng Hai 114,000 0.23

24. Neo Heap (Hiap) Eng 110,000 0.22

25. Tai Siew Koon 110,000 0.22

26. Teo Hua Poh 107,100 0.21

27. RHB Nominees (Tempatan) Sdn Bhd 103,000 0.20- Pledged securities account for Chia Siew Fung

28. Mayban Securities Nominees (Tempatan) Sdn Bhd 100,200 0.20- Pledged securities account for Eng Hock Seng @ Ong Seng Hock

29. Mayban Securities Nominees (Tempatan) Sdn Bhd 100,000 0.20- Pledged securities account for Sum Chi Lin

30. OSK Nominees (Asing) Sdn Berhad 100,000 0.20- UOB Kay Hian Private Limited for Ng Ser Miang

Total 25,448,605 50.36


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DIRECTORS' SHAREHOLDINGS AS PER THE REGISTER OF DIRECTORS' SHAREHOLDINGS AS AT5 MAY 2005

Shareholdings Name Direct % Indirect %

Y. Bhg. Datuk Haji Abdul Razak Bin Alias – – – –

Fong Kok Yong – – 20,348,705 * 40.27

Fong Kiah Yeow – – 20,348,705 * 40.27

Fong Ngan Teng – – 20,348,705 * 40.27

Fong Choon Kai – – 20,348,705 * 40.27

Ng Cheu Kuan 19,000 0.04 – –

Y. Bhg. Datuk Ng Peng Hay @ Ng Peng Hong 13,500 0.03 – –

Haji Baharom Bin Abd. Wahab 4,500 0.01 – –

Mohd Khasan Bin Ahmad – – – –

* Deemed interest by virtue of his interest in F.C.H. Holdings Sdn Bhd.

SUBSTANTIAL SHAREHOLDERS AS PER THE REGISTER OF SUBSTANTIAL SHAREHOLDERS AS AT5 MAY 2005

ShareholdingsName Direct % Indirect %

F.C.H. Holdings Sdn Bhd 20,348,705 40.27 – –

Fong Kok Yong – – 20,348,705 * 40.27

Fong Kiah Yeow – – 20,348,705 * 40.27

Fong Ngan Teng – – 20,348,705 * 40.27

Fong Choon Kai – – 20,348,705 * 40.27

* Deemed interest by virtue of his interest in F.C.H. Holdings Sdn Bhd.

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statistics on warrantholdingsas at 5 May 2005

ANALYSIS BY SIZE OF WARRANTHOLDINGS AS AT 5 MAY 2005

Size of Holdings No. of Holders % No. of Warrants %

Less than 100 20 0.84 708 0.00100 to 1,000 688 29.01 657,770 4.451,001 to 10,000 1,370 57.76 5,857,282 39.5810,001 to 100,000 288 12.14 7,625,800 51.53100,001 to less than 5% of issued warrants 6 0.25 657,700 4.445% of issued warrants and above 0 0.00 0 0.00

Total 2,372 100.00 14,799,260 100.00

THIRTY (30) LARGEST WARRANT HOLDERS AS PER THE RECORD OF DEPOSITORS AS AT5 MAY 2005

No. of PercentageName Warrants (%)

1. Eng Lee Choo 120,000 0.81

2. AB Ghani Bin Haji Mahmood 111,000 0.75

3. Liew Siew Ling 109,000 0.74

4. Chang Hee Foon 106,300 0.72

5. Neoh Hung Por 106,000 0.71

6. Khor Wooi Chen 105,400 0.71

7. Tan Kim Fatt @ Tan Kim Huat 100,000 0.67

8. TCL Nominees (Tempatan) Sdn Bhd 97,400 0.66- Pledged securities account for Foo Chin Mui

9. Lau Loon Sin 97,200 0.65

10. RHB Capital Nominees (Tempatan ) Sdn Bhd 92,200 0.62- Chan Chiau Hee

11. Mak Teck Kiong 91,400 0.62

12. Ho Tau Tai 84,000 0.57

13. Mayban Nominees (Tempatan) Sdn Bhd 78,000 0.53- Pledged securities account for Ng Lian Kiong

14. Mayban Nominees (Tempatan) Sdn Bhd 75,000 0.51- Pledged securities account for Lim Teng Chuan

15. Lim Chee Keong 75,000 0.51


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THIRTY (30) LARGEST WARRANT HOLDERS AS PER THE RECORD OF DEPOSITORS AS AT5 MAY 2005 (cont’d)

No. of PercentageName Warrants (%)

16. Gerard Chen Woon Ming 73,500 0.50

17. Chan Teck Watt 72,000 0.49

18. Kwang Shean Eng 70,000 0.47

19. Choo Yook Choo 70,000 0.47

20. Lim Ooi Tai 70,000 0.47

21. Bobby Lim Chee Wee 67,000 0.45

22. Hong Chong Chay 65,000 0.44

23. Affin Nominees (Tempatan) Sdn Bhd 63,000 0.42- Pledged securities account for Choo Chee Mooi

24. Shamugam A/L Muniandy 60,000 0.41

25. Leow Leong Hai 60,000 0.41

26. Stanley Teo Kwang Yaw 60,000 0.41

27. Ong Tun Poo 59,000 0.40

28. ECM Libra Securities Nominees (Tempatan) Sdn Bhd 58,000 0.39- Pledged securities account for Chin Hai Hong

29. Ong Young Muang 53,800 0.36

30. Ng Shau Lin @ Ng Siow Hin 50,000 0.34

TOTAL 2,399,200 16.21

DIRECTORS' WARRANTHOLDINGS AS AT 5 MAY 2005

Warrantholdings Name Direct % Indirect %

Y. Bhg. Datuk Haji Abdul Razak Bin Alias – – – –Fong Kok Yong – – 7,482 * 0.05Fong Kiah Yeow – – 7,482 * 0.05Fong Ngan Teng – – 7,482 * 0.05Fong Choon Kai – – 7,482 * 0.05Ng Cheu Kuan – – – –Y. Bhg. Datuk Ng Peng Hay @ Ng Peng Hong 400 @ – –Haji Baharom Bin Abd. Wahab 4,000 0.03 – –Mohd Khasan Bin Ahmad – – – –

* Deemed interest by virtue of his interest in F.C.H. Holdings Sdn Bhd.@ Negligible

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list of properties

LOCATION DESCRIPTION TENURE NET BOOK Date of& DETAILS VALUE Revaluation/

RM Date ofAcquisition

100% OWNED SUBSIDIARIES

Lot 5253, 5254, 5255, 5256 & 236 Broiler Farm Freehold 2,391,780 1994GM 551, 552, 527, 528 & EMR 1369Mukim Jeram BatuJohor

Lot 331 & 332 Broiler Farm Freehold 172,554 1994EMR 110 & 119Mukim Api-api, PontianJohor

Lot 3206 Broiler Farm Freehold 88,290 1994H.S. (D) 444Titian BintagorNegeri Sembilan

Lot 4332, C.T. No. 11382 Broiler Farm Freehold 370,290 1994Mukim of RantauDistrict of SerembanNegeri Sembilan

Lot No. 799 & 800 Breeder Farm Freehold 1,585,779 1987Mukim of Sungai SiputDistrict of Alor GajahMelaka

Lot No. 2893 - 2899 Breeder Farm Freehold 3,163,980 1993Mukim of Sungei Baru IlirDistrict of Alor GajahMelaka

Lot 142 Breeder Farm Freehold 1,778,621 1983Mukim of Sungei Baru IlirDistrict of Alor GajahMelaka

Lot No. 401 & 731 Breeder Farm Freehold 787,739 1981Mukim of RamuanCina BesarDistrict of Alor GajahMelaka

Lot 1618, 1854, 1855, 0963, 959, Breeder Farm Freehold 1,686,975 1996639 & 640EMR 1660 Grant No. 4926, 4905,3113, 2374EMR 1122 & 1059Mukim Lenga, MuarJohor


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Lot 458 & 459 Breeder Farm Freehold 2,068,331 1994C.T. No. 8770 & 8771Tebong, TampinNegeri Sembilan

L.O. No. 1039 & 1040 Broiler Farm Freehold 124,933 1994Q.T.(R) 15 & 16Mukim Keru, TampinNegeri Sembilan

Lot 9467 Broiler Farm Freehold 991,758 1995Q.T.(M) No. 182Tanjong SembrongBatu PahatJohor

MLO 8663 Broiler Farm Freehold 646,007 1995H.S.(D) 2631Mukim SembrongJohor

Lot 637, Grant No. 8072 Agricultural Freehold 1,497,609 1994Parit Melana, Alor Gajah LandMelaka

Lot 647 & 658 Vacant Land Freehold 1,333,524 1996Mukim Tanjong MinyakMelaka

P.T. No. 197 H.S.(D) 33179 3 1/2 Storey Leasehold 426,524 2003Kawasan Bandar XXXIX Intermediate (expiringDaerah Melaka Raya shoplot 2075)Melaka

Lot 1599, C.T. 6270 Broiler Farm Freehold 2,173,894 1995Port DicksonNegeri Sembilan

Lot 3937 & 3938 Agricultural Freehold 446,156 1995C.T. 12192 & 12193 LandJuasseh, Kuala PilahNegeri Sembilan

Taman Mewah 6 Units of Leasehold 150,476 1995Alor Gajah 2- bedroom (ExpiringMelaka Apartment in 2091)

PTD 64217 1 1/2 Storey Freehold 359,890 1995H.S.(D) 208128 Terrace FactoryMukim TebrauJohor

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P.T.No.20, Plot 6 Industrial Land Leasehold 1,687,237 1994Mukim Kelemak (ExpiringDistrict of Alor Gajah in 2073)Melaka

P.T.No.18 Industrial Land Leasehold 5,055,751 1994H.S.(M) 1940 (ExpiringMukim Kelemak in 2073)District of Alor GajahMelaka

Lot 3, 4 & 5 Industrial Land Leasehold 12,111,710 1995Masjid Tanah Ind. Estate (ExpiringMasjid Tanah, Alor Gajah in 2095)Melaka

Lot 319, C.T. 107 Broiler Farm Freehold 825,654 1995Mukim Triang IlirNegeri Sembilan

Lot 982, C.T. 295 Agricultural Freehold 232,188 1995Mukim Selandar, Jasin LandMelaka

Lot No. 7688, HS(M) 1733 Broiler Farm Freehold 428,087 1996Tanjong Sembrong (VII)District of Batu PahatJohor

MLO No. 8497 Broiler Farm Freehold 562,749 1997H.S.(M) 2270Mukim TanjongSembrong VII, Batu PahatJohor

Holding No. 2628, SG574/62 Industrial Land Freehold 910,944 1997Mukim Sungei Baru TengahAlor GajahMelaka

Lot 6343, EMR 5758 Vacant Land Freehold 467,340 1997Tangkak, MuarJohor

PT 9176 & 9177 Vacant Land Freehold 312,905 1997H.S.(M) 433 & 434Tanjong SembrongJohor

Lot 2404, EMR 7566 Vacant Land Freehold 376,160 1997Mukim JementahJohor


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MLO 8698, H.S.(M) 4303 Vacant Land Freehold 172,012 1997Tanjong SembrongJohor

Block D2-01-01, Type B1 1 unit of Freehold 165,011 1998Genting View Resort 2 bedroomsPhase 4, Bentong apartmentPahang

Block D1-19, Type P2 1 unit of Freehold 338,198 1998Genting View Resort bedroomsPhase 4, Bentong apartmentPahang

Lot No. 54, Seksyen 4 Industrial Land Leasehold 5,591,377 1997Pulau Indah Industrial Park (99 years)Selangor

PT No.6901, HS(D) No. 34536 Double Storey Freehold 349,836 2000Mukim Bukit Katil Shop / OfficeDaerah Melaka TengahNegeri Melaka

JOINT VENTURE SUBSIDIARIES

Lot 3892, GM153 Broiler farm Freehold 974,094 1996Mukim Rimba TerjunBatu 28, Jalan Johor

Lot 4645 & Lot 4646 Broiler farm Freehold 434,094 1996H.S. (M) 846, Mukim Jeram BatuBatu 31, Jalan JohorJohor

Lot 3021, Mukim Jeram Batu Broiler farm Freehold 239,094 1996Johor

Lot 2620, H.S. (M) 849 Broiler farm Freehold 304,094 1996Mukim Jeram BatuBatu 28, Johor

Lot 4255, GM301 Broiler farm Freehold 549,094 1996Mukim PontianJohor

Lot 116, (Lot 14), Mukim Pontian Broiler farm Freehold 354,094 1996Johor

Lot 3664, Mukim Jeram Batu Broiler farm Freehold 797,951 1996Johor

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EMR 877, Lot 698 Broiler farm Freehold 727,535 1996Mukim Chaah BaruBatu PahatJohor

Lot 420, GM59, Mukim Broiler farm Freehold 285,316 1996Pengkalan Raja PontianJohor

H.S.(D) 68575, Mukim Pulai Double storey Leasehold 240,000 1996Johor Bahru house (99 years)

Lot 2289 & Lot 2290 Broiler farm Leasehold 515,651 1996Lot 7119, Kuala Kabong (99 years)Mukim SedenakJohor

PT 3744, H.S.(D) 5993 Double storey Freehold 182,833 1982Simpang Kanan terrace shophouseBatu Pahat, Johor

Grant 9216, Lot Ptd 857 Broiler farm Freehold 488,032 1987Mukim ChaahJohor

Lot 1310, GN47071 Poultry processing Freehold 1,776,904 1991Minyak Beku 6, Batu Pahat plant & coldrooms /Johor office block

Lot 976, M.K. GM 419 Broiler farm Freehold 224,658 1995Minyak Beku 6Batu PahatJohor

EMR 773, Lot 979 Broiler farm Freehold 120,000 1995Minyak Beku 6Batu PahatJohor

H.S.(M) 1745, MLO 8674 Broiler farm Freehold 140,000 1995Tanjung Sembrong 14Batu PahatJohor

Lot 8255, H.S.(M) 4751 Vacant land Freehold 244,262 1997Mukim Tanjung LabuhBatu PahatJohor


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Lot 3233, EMR 5066 Broiler farm Freehold 589,945 1997Minyak Beku 6Batu PahatJohor

Lot 1730, CT 2851 Double storey Freehold 329,947 1998Bandar Penggaram terrace shophouseDistrict of Batu PahatJohor

PTD 2163, H.S.(D) 5124 Layer farm Freehold 1,167,957 1997Mukim GrisekDistrict of MuarJohor

PTD 2164, H.S.(D) 5125 Layer farm Freehold 547,658 1997Mukim GrisekDistrict of MuarJohor

PTD 2165, H.S.(D) 5126 Agricultural land Freehold 256,232 1997Mukim GrisekDistrict of MuarJohor

PTD 2166, H.S.(D) 5127 Agricultural land Freehold 256,232 1997Mukim GrisekDistrict of MuarJohor

PTD 2167, H.S.(D) 5128 Layer farm Freehold 930,979 1997Mukim GrisekDistrict of MuarJohor

PTD 2168, H.S. (D) 5129 Layer farm Freehold 980,774 1997Mukim GrisekDistrict of MuarJohor



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PTD 6321 Grant 4778 Layer farm Freehold 292,485 1997Mukim GrisekDistrict of MuarJohor

PTD 976, Grant 45584 Office space Freehold 1,482,520 1999Bandar MaharaniDistrict of MuarJohor

PTD 802 Agricultural land Freehold 580,000 1999Mukim GrisekDistrict of MuarJohor

Lot 3256 & 3257 Broiler Farm Freehold 317,780 1994EMR 1113 & 1148Mukim PontianJohor

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I/We(Full Name in Capital Letters)

of (Full Address)

being a Member of SINMAH RESOURCES BERHAD hereby appoint

of (Full Name in Capital Letters) (Full Address)

or failing him, of (Full Name in Capital Letters)

(Full Address)or failing him, the CHAIRMAN OF MEETING, as *my/our proxy to attend and vote for *me/us and on *my/our behalf at the EleventhAnnual General Meeting to be held at Bilik Bunga Teratai, 7th Floor, Renaissance Melaka Hotel, Jalan Bendahara, 75100 Melaka onTuesday, 28 June 2005 at 11.00 a.m. and at any adjournment thereof.

Please indicate with an "X" in the space provided below how you wish your votes to be casted. If no specific direction as to voting isgiven, the proxy will vote or abstain from voting at his (her) discretion.

No Resolutions For Against

1 Receive the Audited Financial Statements for the period ended 31 December 2004 togetherwith the Reports of the Directors and Auditors thereon.

2 Approve the Directors’ fees for the period ended 31 December 2004.

3 Re-election of Mr. Fong Kok Yong who retires pursuant to Article 106 of the Articles of Association.

4 Re-election of Mr. Ng Cheu Kuan who retires pursuant to Article 106 of the Articles of Association.

5 Re-election of Encik Mohd Khasan Bin Ahmad who retires pursuant to Article 106 of the Articles of Association.

6 Re-appointment of Tuan Haji Baharom Bin Abd. Wahab who retires pursuant to Section 129 (2) of the Companies Act, 1965.

7 Re-appointment of Messrs Ernst & Young as the Company’s Auditors and to authorise the Directors to fix their remuneration.

8 Proposed Change of Company’s Name from Sinmah Resources Berhad to Farm’s Best Berhad.

* Strike out whichever is not applicable.

Dated this day of 2005Number of shares held:

Signature of Member/Common Seal

Notes:1. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy or proxies to attend and vote on his (her) behalf. A proxy may but

need not be a member of the Company and the provisions of Section 149(1)(a), (b), (c) and (d) of the Companies Act, 1965 shall not apply to theCompany.

2. Where a member appoints two (2) or more proxies, the appointment shall be invalid unless he (she) specifies the proportion of his (her)shareholdings to be represented by each proxy.

3. The Proxy Form shall be signed by the appointor or his (her) attorney duly authorized in writing or, if the member is a corporation, must be executedunder its common seal or by its authorized attorney or officers.

4. The instrument appointing a proxy shall be deposited at Level 17, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, 50490 KualaLumpur, not less than 48 hours before the time set for the Meeting or any adjournment thereof.

5. Explanatory Note:-

Re-appointment of Director over 70 years of age

The Ordinary Resolution No. 6 proposed under item (4) above is in accordance with Section 129(6) of the Companies Act, 1965 which requires thata separate resolution be passed to re-appoint Tuan Haji Baharom bin Abd. Wahab who is over 70 years of age as Director of the Company and tohold office until the conclusion of the next Annual General Meeting of the Company. The Resolution must be passed by a majority of not less thanthree-fourths of such Members of the Company as being entitled to vote in person or where proxies are allowed, by proxy at the Annual GeneralMeeting of the Company.

Proposed Change of Name

The Special Resolution No. 1 proposed under item (6), is to change the name of the Company to take advantage on the popularity of the trade mark"Farm’s Best" as registered under the name of the Company’s subsidiary, Sinmah Food Industries Sdn Bhd. The proposed change of name to "Farm’sBest Berhad" is to better reflect the Company’s activities and ownership. The special resolution will require the passing by a three-fourths majority ofthe members present and voting in person or by proxy.

SINMAH RESOURCES BERHAD301653-V

form ofProxy

Depot-depot FARM’S BEST di Semenanjung Malaysia

FARM’S BEST depots in Peninsula Malaysia

RAWANG

25, Jalan BJ7, Taman Perindustrian Belmas Johan48000 Rawang, SelangorTel : 03-6092 2024Fax: 03-6091 9936

SELAYANG

Lot A10 & A11Wira Business CentreJalan Besar Selayang Baru68100 Kuala LumpurTel : 03-6136 2358Fax: 03-6136 2355

KLANG

225, Jalan Pekan BaruOff Jalan Meru, Kawasan 1741050 KlangSelangorTel : 03-3343 5359/5516Fax: 03-3343 5516

PUCHONG

No. 14439, Ground FloorJalan Puchong, Batu 7 1/2Puchong 47100SelangorTel : 03-8070 5826Fax: 03-8070 2301

SEREMBAN

No. 1, Taman Harapan BaruJalan Rasah70300 SerembanNegeri SembilanTel : 06-632 5708Fax: 06-632 5706

MELAKA

No. 154, Jalan Suria 2Taman Malim Jaya75200 MelakaTel : 06-337 5992Fax: 06-335 8266

JOHOR BAHRU

9, Jalan Bayu 2/5Taman Perindustrian Tampoi Jaya81200 Johor Bahru, JohorTel : 07-235 0310Fax: 07-235 0306

IPOH

80, Jalan Leong Boon Siew30000 Ipoh, PerakTel : 05-242 5081Fax: 05-242 5082

BUTTERWORTH

No. 8, (Plot 48)Taman Industri Beringin @Juru Industrial ParkJuru Mukim 13Seberang Prai Tengah14100 Pulau PinangTel : 04-507 6449Fax: 04-507 7068

TEMERLOH

53, Jalan Ahmad Shah28000 TemerlohPahangTel : 09-296 8223Fax: 09-296 6223

KUANTAN

B-32, Jalan Air Putih25300 KuantanPahangTel : 09-567 0223Fax: 09-567 0221

REPRESENTATIVE OFFICE

KOTA BHARU

No. 11, Jalan HospitalKedai MPKB, Barek 1215200 Kota BharuKelantanTel/Fax : 09-747 9636

SINMAH RESOURCES

BERHAD (301653-V)

sinmah resources berhad

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